Government concerned about rupee: FinMin official

The government, for the first time since the rupee started plummeting against the dollar, admitted that it was worried about the situation and was in constant touch with the Reserve Bank of India on the matter.

A senior finance ministry official said the central bank has many options which can be utilised if need be, including a swap window for FCNR(B), similar to the one used during 2013 to deal with the fall in rupee.

He said that there was no need to panic over the rupee’s decline against the dollar. “The government is vigilant on the depreciation of the rupee. We are in regular touch with the RBI,” the official said.

The official said that the RBI is intervening in the market, when it deems necessary. “There is a wrong impression in the market that the government is not concerned about the rupee,” the official added. The RBI has been selling dollars to prop up the rupee albeit leading to a drop in India’s foreign exchange reserves to $400 billion from a record high of $426 billion in mid-April.

He said the country’s forex position was comfortable and authorities could take measures such as tapping overseas Indians through FCNR(B) and other moves to plug the current account gap. Meanwhile, the rupee, on Monday, crashed below the 72-mark to end at a life-low of 72.45 against the US dollar. on growing fears of contagion from an emerging-market rout and escalation of global trade war.