RBI moves to stop rupee fall
In a move to stem the continuing fall of the rupee, the RBI on Monday night came out with a slew of measures, including hiking the lending rates for banks and sucking up of `12,000 crores, to make the currency dearer.
The measures came after high-level meetings between the Prime Minister and the finance minister followed by discussions with RBI governor D. Subbarao who was called here on Monday as the rupee lost 33 paise to reach 59.89 after touching over-61-levels last week.
Under the measures announced, the RBI raised lending rates to commercial banks two per cent to 10.25 per cent, making the loans costlier.
The RBI will conduct a sale of Government of India securities to suck up `12,000 crore on July 18 from the market in a move to make the rupee dearer.
The government has been under attack over the continuous decline of the rupee from 53.8 against the dollar in April.
On Sunday, Gujarat chief minister Narendra Modi had made a blistering attack on the government’s financial management and targeted Prime Minister Manmohan Singh, calling him a “failed economist”.
The Marginal Standing Facility (MSF) rate has also been increased to 10.25 per cent from the current 8.25 per cent.
The repo rate has been left unchanged.
The Reserve Bank of India said it could take more measures depending on market conditions, liquidity situation and macroeconomic developments.
Post new comment