BIZ-RUPEE-GARG

Rupee might stabilise at 68-69 a dollar: Garg
Kolkata, Aug 18 (PTI) The rupee, which has taken a
severe battering of late, is expected to stabilise at 68-69
per US dollar level riding on positive capital inflows this
month, Economic Affairs Secretary Subhas Chandra Garg today
said.
    The rupee is already Asia's worst performing currency
and had touched an all-time low of 70.09 per US dollar on
Tuesday.
    According to Garg, the current turmoil in Turkey,
triggered by US sanctions, had not affected the perception of
India. The flow of foreign portfolio investments (FPI) had not
altered either and there had been no outflow in July, Garg
said while speaking at an interactive session organised by the
Merchants' Chamber of Commerce & Industry here.
    During the first three months, there had been outflow
of capital and in the last year the total outflow was USD 20
billion, he added.
    "If oil prices do not rise further, the chances of the
rupee stabilising at 68-69 level is more," Garg said.
    When asked how the rupee will be affected if China
devalued its currency, he said that for the first time in the
last 20 years, the Chinese economy had experienced current
account deficit (CAD).
    "Now China's exports and imports are altering
fundamentally. So far, the depreciation of the Chinese yuan
was not so high. Even if the Chinese currency is devalued,
India will not be affected as long as the depreciation of all
currencies vis-a-vis the dollar was similar," he added.
    There would be no problem as terms-of-trade would not
change, Garg said.
    "However, we are watching closely to what extent China
devalues its currency," he said.
    Owing to high oil prices, India's CAD had risen to 1.9
per cent for which the rupee was depreciating. This called for
a need for higher capital inflows, he added. PTI DC
JM JM
JM