Fundamentals very strong, FinMin assures investors

Tags: News
The Finance Ministry today sought to assure the investors that the country's fundamentals are "very strong" even as the rupee slipped to below 63 to a US dollar and the BSE Sensex plunged by over 426 points on global cues, following currency crisis in Argentina.

"Current Account Deficit (CAD) is below USD 50 billion. Foreign exchange reserves are (at) all-time high. We have very strong fundamentals... I don't think that there is any cause of worry," Economic Affairs Secretary Arvind Mayaram told reporters here.

He was responding to a query regarding the sudden decline in the value of the Indian rupee. The domestic currency slipped to nine-week low of Rs 63.1 to a dollar, while the BSE Sensex plummeted by over 2 per cent or 426.11 points to close at 20,707.45.

Referring to impact of peso crisis in Argentina on the Indian markets, Mayaram said: "There is no reason why we should believe that if Argentina is in trouble today then Indian rupee should follow. I do not think that correlation exists at all."

The steep decline in Argentina's currency peso on Friday triggered a massive fall in stock markets around the world including in India.

On the rupee, Mayaram said: "You would see rupee will remain range bound. There will be some ups and downs but that is normal in markets. And therefore I think we should not be overtly concerned with marginal movements of rupee."

The currencies world over behave in a different manner depending on their own fundamentals, he said, adding that India has seen considerable improvement in its CAD situation.

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