New Delhi: The Reserve Bank of India will continue to take best possible steps to check the fall of the Indian currency, Deputy Governor K C Chakrabarty said Friday, after the rupee tumbled to a record low of 57.32 against the dollar earlier this month.
"Whatever best possible... what Reserve Bank needs to do, Reserve Bank will continue to do that," Chakrabarty told reporters Friday on the sidelines of an event.
The rupee, which had made some gains in the beginning of this year after falling to a low of 54.32 versus the US dollar in December 2011, is again sliding as investors are concerned over India's widening current account deficit, uncertainty over government's policy reforms and decelerating economic growth.
India's current account deficit was $78.2 billion or 4.2% of the gross domestic product (GDP) in the last fiscal 2011-12, higher than the $46 billion deficit in the previous fiscal, according to RBI data.
Recently, RBI Governor D Subbarao said the future movement of the Indian currency will depend on efforts to resolve both domestic and global factors like the country's widening current account deficit and the Euro zone debt crisis.
Earlier this week, the central bank of India announced a handful of measures like raising the foreign institutional investor (FII) investment limit in government bonds by $5 billion to $20 billion to shore up flagging investor sentiment and stem the rupee fall. This was in addition to the string of other administrative measures taken by the RBI recently.
The RBI also recently wrote to the oil marketing companies, asking them to buy at least half of their dollar needs from the country's largest lender State Bank of India (SBI) in a bid to ease pressure on the falling rupee, media reports had said.
In May, the government allowed foreign retail investors to buy local corporate bonds as well as mutual fund debt for up to $1 billion to stimulate foreign capital inflows in the country and shore up the embattled rupee.