As Rupee Plunges to Historic Low Against US Dollar, Govt Tells RBI to 'Intervene Aggressively'

Team Latestly
Assuming a normal monsoon in 2019, the Reserve Bank of India (RBI) on Wednesday said that inflation is likely to stay in the range of "2.7-3.2 per cent in H2 of 2018-19 and 3.8-4.2 per cent in H1 of 2019-20, with risks tilted to the upside."

New Delhi, Sept 11: In wake of the rupee plunging to new lows on daily basis, the Reserve Bank of India has been told by the Centre to "intervene aggressively" in a bid to prevent further deterioration.

Also Read | Rupee Continues to Fall Against US Dollar, Touches Record Low of 72.66

Top government officials, while speaking to Bloombergsaid the government has communicated with the RBI to take immediate measures which could resurrect the Indian rupee against the US dollar.

Among steps which the central bank is mooting, include deposits schemes for non-resident Indians, the officials were reported as saying on the condition of anonymity.

Also Read | Rupee Falls Further, Now Hits 72.35 Per Dollar

Rupee has sunk by 11.6 per cent this year -- a major chunk of which has come in the past three months, ever since the US dollar began dominating currencies of the world, including the Chinese yuan.

With US President Donald Trump signalling a further conservative approach towards bilateral and multilateral trades, experts claim the dollar could further strengthen its position.

According to a recent note of warning issued by SBI's Chief Economic Advisor Soumya Kanti Ghosh, India may have to shell out an additional Rs 68,500 crore while repaying the short-term overseas loan, if the dollar averages at $76 per barrel at the year-end.

Although the RBI is mandated to take interventionary measures to maintain macroeconomic stability, the central bank has so far not been issued any specific order to curb undue volatility in the currency. In May, the bank had sold foreign currencies worth $5.8 billion, followed by a sale of $6.18 billion-worth foreign currency in June.