Wednesday 26 September 2007

Finance Minister on Rupee rise

FM: Rupee rise way beyond comfort levels, exporters have to live with these levels



Finance Minister P. Chidambaram has said the Indian rupee's current exchange levels against the U.S. dollar were "way beyond comfort levels," Press Trust of India reported today.

The finance minister, however, said exporters have to "learn to live with this" levels. Unless the U.S. government does something about the dollar, there is nothing much I can do about the rupee, as far as the rupee-dollar parity is concerned," the news agency quoted Chidambaram as saying. Chidambaram, who is currently in New York, was speaking at Peterson Institute for International Economics.

Without being frivolous, he expressed his concerned about this rapid appreciation of the currency. Since January, the Indian rupee has risen about 11.5% against the dollar, on strong capital inflows. Tuesday, the Reserve Bank of India liberalised overseas investment norms for Indian companies and mutual funds in an apparent bid to stem the rupee's rise.

The central bank allowed Indian companies to invest up to 400% of the net worth in overseas ventures and pre-pay up to $ 500 million external commercial borrowings without prior approval. Despite the RBI measures, the rupee continued to rise against the dollar.

Currently the rupee was trading at 39.70 against the dollar compared with Tuesday's close of 39.74.