Rupee at 65-66 against dollar reflects 'fair valuation': DEA Secy

The Indian Rupee at 65-66 per US dollar is its ‘fair’ value and intervention is not required, Economic Affairs Secretary Subhash Chandra Garg has said, dismissing concerns of the impact of a dropping currency on the economy.

Garg, who is in Manila to attend a meeting of the Asian Development Bank (ADB) told PTI that with oil steadying at $75 per barrel and India allowing foreign portfolio investors (FPIs) to invest in treasury bills, the rupee would be around 66-67 against dollar for some time.

"My sense is that there is stability now and this level of (rupee at) about 66-67 (to a dollar) should be the level that should prevail for some time," he said, adding, "Rupee appreciated to 64 or something. That is where it hurt our exports. 64 was not at the level which was justified by the real exchange rates. So coming back to 65-66 is a fair valuation."

A fall in rupee can potentially impact the current account deficit as India relies on imports to meet over 80 per cent of its oil needs.

Garg also said that there was no need to intervene as he does not believe that anything is likely to happen. 

"I don't think there is any move to intervene... there is depreciation and therefore RBI should sell dollars to support. I don't think there is any such need. I don't believe anything is likely to happen," he said.

Earlier this week, the Reserve Bank permitted FPIs to invest in treasury bills issued by the central government. However, they will have to ensure that their exposure in government securities, as well as corporate bonds of less than one-year maturity, remains below 20 per cent, according to PTI.