The Finance Minister pointed out that the inflow of funds has led to the rupee’s rise – the rupee has risen more than 12.5 per cent this year. “The rise of the rupee is not in our comfort zone,” Chidambaram said, adding, “We have announced relief for our exporters and are regularly monitoring the situation. Now we must find ways and means to manage competitive exchange rate without hurting investments.”

At a meeting with media-persons in New Delhi, Chidambaram said that the steep rise in Sensex often surprised him, and sometimes worried him. He was aghast that the fundamentals were changing so rapidly day-to-day and confessed that the government’s assessment says that the Sensex is driven by copious flow of funds from a number of sources abroad.

The Finance Minister was also amazed that the Sensex attained 16th record high in just 17 sessions on Friday morning. Nevertheless, it closed down 2.1% down at 18,419.04 later.

It may be noted here that the stock market had lost heavily in August on apprehensions regarding the US credit crisis. The Sensex was dealing at the 14,000 level in July, earned more than 4,500 points in the September and recovered over 20 per cent since September 18, as FIIs invested more than $6.2 billion after the US Federation slashed interest rates.

The benchmark Bombay Stock Exchange Sensitive Index, or the Sensex, had gained nearly 34 percent this year, led by record net overseas fund inflows of 16.54 billion dollars by the time the stocks closed on Friday. According to some finance experts, the rupee could be at 38 to the dollar by mid-next year or even lower. Already the rupee has gone up by over 11 percent this year against the dollar; making it Asia's best performing currency.

While Chidambaram confirmed that the rupee’s growth to its 9-1/2 year records versus the US dollar had taken it out of the government’s fundamental quantity, he remarked that the government agencies would once again gain control over the abundant quantities of capital falling into the financial system. 

Be first to comment this article

Write Comment

Please keep the topic of messages relevant to the subject of the article. Personal verbal attacks will be deleted. Please don't use comments to plug your web site. Such material will be removed. Just ensure to *Refresh* your browser for a new security code to be displayed prior to clicking on the 'Send' button. Keep in mind that the above process only applies if you simply entered the wrong security code.
Name:
E-mail
BBCode:
Comment:
Code:*
	I wish to be contacted by email regarding additional comments

Powered by AkoComment Tweaked Special Edition v.1.4.4