A day after the rupee hit an all-time low against the dollar, Finance Minister P. Chidambaram said there was no need to react or panic.
The rupee had slumped to a record low of 59.58 to the dollar on Thursday, after the US Federal Reserve announced that it intended to gradually end its stimulus package.
Briefing reporters after a meeting of the Cabinet Committee on Economic Affairs here on Friday, Chidambaram said the Reserve Bank of India will take steps to manage the situation. He said currencies world over were losing ground.
“We are watching the situation, the RBI will take whatever action it has to take… We will do whatever has to be done. My request is, you should not react in panic, its happening around the world,” Chidambaram said.
He said the Government was not happy with the situation“Why should there be such a reaction in the world market. Obviously that money which is being pulled out from all emerging markets will ultimately have to find a place,” he said and added that the statement of US Federal chief Ben Bernanke was misunderstood by the markets.
When asked if the Government was worried about the National Sample Survey Organisation’s data on rising unemployment, Chidambaram said there were no such findings by the organisation. He said employment had increased since 2009 due to various steps taken by the Centre.
Chidambaram’s assurance comes even as the Opposition Bharatiya Janata Party criticised the Government’s fiscal management policies following the depreciation of the rupee and the National Sample Survey Organisation’s findings that unemployment had increased.
BJP spokesperson Prakash Javadekar said the economic mismanagement of the United Progressive Alliance Government is “deeply hurting” the common man and the country. “While the growth rate, value of the rupee, exports, jobs and investor confidence are falling, there has been unprecedented rise in inflation, food prices, corruption, CAD and fiscal deficit. This is the glaring failure of the Economist-Prime Minister in managing the Indian economy.”