Rupee will correct itself, says Chidambaram

NEW DELHI (TIP): Finance minister P Chidambaram on September 5 expressed disappointment at the decline in economic growth but assured the Lok Sabha that the rupee will correct itself. Conceding that the economy was going through a period of stress, he said the government has been taking corrective steps to check the rupee’s slide. “The value of rupee is indeed a matter of concern… Rupee must find its appropriate level… we think it has overshot its value. Rupee correction will take place,” he said, winding up a discussion on the first batch of supplementary demands for grants which was passed by voice vote. The value of rupee depends upon various macro-economic factors like fiscal deficit, current account deficit and inflation, he said. “If inflation is high, if our fiscal deficit is high and if our current account deficit is high… it will necessarily mean correction in the value of rupee. (However) the correction is the over-correction. It has overshot its true value. The rupee is more undervalued than it should be.” Disappointed over decline in growth in the first quarter of 2013-14 to 4.4% from 5.4% a year ago, he said, “We should (not) give room to gloom and pessimism. These ups and downs will happen in the life of a country, we will bounce back.”

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