Gulf News: Shweta Jain
The Indian economy will continue to grow despite the rupee's current free fall, was the optimistic note on which renowned Indian bankers forming the Indian Business and Professional Council yesterday based a debate on the recent volatility of the Indian rupee
and its aftermath.
"The worst is over," said K. Venkata Rama Moorthy, CEO, Bank of Baroda, adding that India is heading to better days. "The rupee will be reaching a reasonable level soon," he said.
Ajay Kumar of Corporation Bank said: "India has a great growth story and it will continue its growth. These [rupee depreciations] are minor obstacles."
Advocating a calm approach, Kumar said that while the 20 per cent fall in the Indian currency is a big one, the worst is over.
G. Raj Kumar Nair, CEO of Punjab National Bank, said: "The depreciation of the rupee has taken place many times before. Don't be jittery about the present situation. India will grow."
Money flow
Gulf News asked the IBPC panellists what steps India's central bank and the government could take to prevent a rupee free fall.
According to IBPC President Dr Bharat Bhutaney, RBI is devising ways to improve the flow of dollars into the country instead of making concrete fiscal or monetary changes. "We need strong structural changes in the monetary and fiscal policies which the Government
of India and the RBI have to sit together and sort out," he said.
K.V. Shamsudeen of Barjeel Geojit Securities said: "The RBI has to take some action to control the rupee's fall, and it has to act quickly."
He added that in the last six months of the current financial year, India received $59 billion [Dh216.33 billion] in remittances from the Indian diaspora from across the world "and if things continue this way, this financial year ending on March 31, 2012, India
may get $100 billion," he told Gulf News.
SBI's Debajyoti Ray Chaudhuri, however, is of the opinion that the RBI has done enough. "It should not do more than this. The other option for them is to use forex reserves," he said.
(The views expressed above are the personal views of the author)