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Rupee touches 70, RBI steps in as Government says no need to worry yet

The Indian rupee Tuesday plunged below the 70 level to hit a record low of 70.08/09 against the dollar as the currencies of emerging markets witnessed a rout, triggered by the crash in the Turkish lira. The rupee, however, recovered later to close at 69.89/90 after heavy intervention by the Reserve Bank of India (RBI). When the rupee hit the 70 level against the dollar for the first time, the RBI sold dollars through public sector banks, preventing a further slide. On Monday, the rupee crashed by Rs 1.08, or 1.57 per cent, to end at a historic low of 69.89 against the US currency as the Turkish currency, lira, plunged, sending global currencies into a tailspin. Economic Affairs Secretary Subhash Chandra Garg attributed the fall in the rupee to “external factors” and said there is nothing to worry about it as long as the depreciation is in line with other currencies. SBI chairman Rajnish Kumar said: “Various currencies have depreciated and these days since economies are connected, it is natural for rupee to be impacted by this. Our currency, in comparison to many other currencies, has not seen that much depreciation. I feel it should stabilise anywhere between 69 and 70 because if you look at the numbers that have come into the country as investment in bonds and equities, this investment has become attractive for foreign investment and figures for both July and August are positive.”

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