Govt won't devalue rupee: Finance Minister
Tribune News Service

NEW DELHI, Aug 13 — The government is not unduly worried about the plunging value of the rupee and it has no plans to devalue the currency in the immediate future, the Union Finance Minister, Mr Yashwant Sinha, said here today.

Mr Yashwant Sinha told a high-level meeting of leaders of financial institutions, banks and industrialists here today that while allowing the market to determine the value of the rupee the government would take appropriate steps to fight speculation in the foreign exchange market.

"In a system that we operate today it will be futile to fight the market. But, we can fight speculation and not allow the rupee to run" the Minister said at the meeting, organised by the Federation of Indian Chambers of Commerce and Industry.

Earlier, speaking to reporters, Mr Sinha said a possible devaluation of the Yuan by China following the turmoil in the forex markets of major Asian countries would impact India.

However, he added that "if you know the kind of arrangement under which the value of the rupee is determined against external currencies then you won’t have to take a deliberate decision to devalue it."

Mr Sinha expressed concern over the continuously declining value of East Asian currencies over the past few days, especially that of the Japanese yen.

The Finance Minister’s assertion came even as the rupee continued to nose-dive crashing below the psychological barrier of Rs 43 to a dollar today.

Mr Sinha said he was not concerned about day to day fluctuations and speculation was his only worry. He said when the rate of the rupee slides up from Rs 42.95 to Rs 43.10, the media describes it as a major plunge. But for the Government it is only a ten paise adjustment.

Having decided to go in for globalisation, India could not insulate itself against unfavourable developments in the rest of the world and it should be prepared to face it.

In the past too, the value of the rupee had crashed but then over a period of time it had stabilised.

"We are confident that we would be able to weather the storm this time too and there is no reason for panic", he added.

Meanwhile, a senior banker told TNS that the run on the rupee in the last couple of days was more due to internal factors. The political instability arising out of Ms Jayalalitha’s threat to topple the government coupled with the State Bank of India’s decision to make substantial purchases on behalf of a large public sector undertaking created panic amongst forex traders with importers rushing to cut losses.

He expected the rupee to gain lost ground in the coming days.

MUMBAI (PTI): The Indian rupee on Thursday rallied against the US greenback following the Union Finance Minister Yashwant Sinha's verbal intervention that the "Indian currency will find its own level", after it had tested fresh lows in early trade at the interbank foreign exchange market here.

Opening lower at Rs 43.00/10 per dollar, the rupee dipped to an intraday low of Rs 43.26/29 on allround demand for greenbacks due to continued political uncertainty but later rallied to a high of Rs 43.05/08 in late afternoon business on the Finance Minister's verbal support for the currency.

Although the rupee logged a new record low for a closing quote at Rs 43.08/12, showing a further sharp depreciation of eight paise from overnight levels of rs 42.95/43.05.

19 die in train-bus collision

KARUR (Tamil Nadu), Aug 13 (UNI) — At least 19 persons were killed when the Chennai-Kanyakumari Express collided with a bus at a level crossing at Moorthipalayam on the Karur-Salem road early today.

The injured were admitted to government hospital at Karur. Some of them were said to be in a serious condition.

The person manning the gate, said for the past few days the communication network between the Karur junction and his cabin had not been functioning properly and this had been brought to the notice of the officials concerned. Since no action was taken, he was forced to operate the gate manually after observing the trains, he said.

A departmental probe had been ordered into the accident.

Tamil Nadu Chief Minister M. Karunanidhi, while expressing grief over the incident, sanctioned Rs 50,000 each to next of kin of the dead. He also sent three of his cabinet colleagues to the scene of the accident to monitor relief and rescue operations.

The bodies of four killed were identified and sent for a post-mortem.

Union Power Minister Rangarajan Kumaramangalam conveyed his condolences to the bereaved families and urged Railway Minister Nitish Kumar to sanction compensation to the families of the victims.

Southern Railway sources told UNI that Mr Aravindan, Divisional Manager (Palakkad) was supervising the relief operations.

An information centre had been set up at the Karur station.