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Instan Tip

By Anand Adhikari     July 17, 2007

Central bank should intervene at the earliest to check the rupee from appreciating any further against the US greenback.

Should the Reserve Bank of India intervene to stop the rupee from strengthening further?

Yes. V.N. Dhoot, President, ASSOCHAM

Our view is that the central bank should intervene at the earliest to check the rupee from appreciating any further against the US greenback as it is beginning to hurt the competitiveness of Indian exports.

No. Rajesh Mokashi, Executive Director, Care Ratings

It is quite clear that the country is gradually moving towards full convertibility of the rupee. In such a scenario, I feel there can be very little room or justification for intervention in the currency market by the Reserve Bank of India.

Maybe. Aditya Puri, MD & CEO, HDFC Bank

When foreign inflows come into the country, the central bank can either let it go into the market or step in to buy the dollars. If RBI buys dollars, it creates liquidity that has to be mopped up or else fuels inflation and puts pressure on interest rates.

If it doesn't buy dollars, the rupee appreciates. As things stand today, I feel there is definitely an issue if foreign inflows keep rising in future.


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