ZCZC
BCN-14
INDIA-RUPEE-USD
Rupee has not depreciated to a worrying level, says Rajan
New Delhi, Aug 25, 2018 (BSS/PTI) – Former RBI Governor Raghuram Rajan has
said that the rupee has not depreciated to ‘too worrying levels’, though the
government needs to take care of the widening current account deficit (CAD).
The rupee on August 16 had slumped to a life-time low of 70.32 on strong
demand for the US dollar.
The rupee today staged a good recovery to end higher by 20 paise at 69.91
against the US currency on bouts of dollar selling by exporters and
corporates.
“Well just to be fair, the Indian authorities have brought down the fiscal
deficit. What has expanded is the current account deficit. A lot of it driven
by higher oil prices,” he said.
“The rupee has not depreciated to too worrying levels, its sort dollar
strength around the world,” Rajan told a TV channel.
Rajan, who was RBI governor for three years till September 2016, said
further that this is a time where countries should be focusing on getting the
macro stability in order.
“Going into election year, countries like India and Brazil should try their
level best to look as good as possible,” he said.
On the controversy over back series GDP data which showed that the growth
was better during UPA regime, Rajan said: “What we have to do right now is to
look forward…its growing at about 7.5 per cent.”
India, he added, has to make sure that CAD does not grow out and fiscal
stability is maintained. Replying to a query on rising bad loans, Rajan said
there is a need to improve governance in the banks.
“My sense is that whichever new administration comes this will be task
number one for them,” Rajan, who is currently the Katherine Dusak Miller
Distinguished Service Professor of Finance at Chicago Booth School of
Business said.
India’s trade deficit soared to a near five-year high of USD 18 billion in
July, raising concerns on the current account front.
Recently, a top finance ministry official said that the government will
meet the fiscal deficit target for the current fiscal but is also expecting
some slippage in the CAD on higher crude oil prices.
BSS/PTI/HR/1030