RBI has plenty of reserves and arrows in its quiver to combat the rupee volatility but the core issues of current account deficit (CAD) and issue of struggling exports needs to be addressed, said Ananth Narayan, professor at SPJIMR.
The move was pretty rapid and a very sharp fall in the rupee is not helpful for anybody, not for exporters, not for importers and not for the country as a whole, Narayan said.
Prime Minister Narendra Modi is expected to hold an economic review meet this weekend to assess intervention measures to stem the fall in rupee’s value, said people familiar with the matter.
The rupee had touched a new record low of 72.90 in the morning trade but recovered sharply from the day’s low.