India will monitor movements in its currency “for some time,” to assess whether and when it needs to take steps to curb swings, Finance Minister Pranab Mukherjee said.
“We will watch the situation for some time,” Mukherjee said in response to reporters’ questions today in Washington. “As and when intervention will be required, that will be considered at that stage.”
India’s rupee completed its worst week in 18 years as investors sold emerging-market assets in favor of the relative safety of the dollar amid concern the global economy is slowing. The currency lost 4.6 percent in the biggest weekly plunge since March 1993.
Mukherjee said that he had a discussion about the rupee with India’s central bank Governor Duvvuri Subbarao while both are in Washington to attend the annual meetings of the International Monetary Fund and World Bank this week. Still, “what I feel or what I value is not important” in the context of steps to be taken, Mukherjee said today.
Two days ago, Mukherjee told reporters in New York that the Reserve Bank of India is currently not intervening in the currency market to curb excessive swings in the rupee. The RBI will sell dollars to control movements in the exchange rate, though “right now there is no such situation,” Mukherjee had said Sept. 21.
The RBI may intervene if the rupee falls to levels seen during the financial crisis of 2008 and 2009, a finance ministry official said today in New Delhi, asking not to be identified because he’s not authorized to speak on the matter.
The Indian currency reached 49.43 per dollar at the 5 p.m. close in Mumbai.
To contact the reporters on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net Kartik Goyal in New Delhi at kgoyal@bloomberg.net
To contact the editors responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net Stephanie Phang at sphang@bloomberg.net
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