RBI considering all options to check rupee slide
As rupee continued its downward slide, RBI deputy governor Subir Gokarn on Friday said all options are considered to check its fall.
The steps taken by RBI ‘has so far contributed to stability and curbing volatility is the main aim’, he said.
"All options are considered, all options have some pros and cons, RBI would not be doing things which could be 'costly and destabilise' at some point", Gokarn told reporters to a query on the steep fall of the rupee in recent times.
On whether RBI will consider selling dollar directly to oil companies as it did in 2008 to curb further volatility in the rupee, he said all options are considered.
"The approach over the last few months have been a combination of intervention at times when we have felt it will help us stabilise, and some administrative action. This is the approach that will work now," Gokarn said on the sidelines of an event here.
Meanwhile, the rupee touched an intra-day low of Rs 54.90 against the US dollar on fresh demand from bankers and importers.
In order to prop up the rupee, the RBI had in the recent past taken a slew of measures including raising interest rate on NRI deposits in foreign currency to promote inflows.
To discourage outflow of the greenback, the Reserve Bank, earlier this month had instructed exporters to sell 50 per cent of their retained foreign exchange earnings.
It had also fixed limit for intra-day trading of foreign currency by banks.
Gokarn said "RBI needs to be careful in measuring benefits on certain action and cost", adding "it won't come in the way of end use of foreign reserves and create constraints for importers and exporters".
On the forex reserve position, he said: "We are a current account deficit country structurally, but we are adequately covered to obligations. We do not have to worry on that".
The current account deficit rose to 4.3 per cent in the last quarter ending December.
To stem the rupee fall, the RBI has also been selling dollars from its USD 294-billion reserves.
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