Rupee is stable when depreciates in orderly manner: KC Chakrabarty

Says non-appreciation or non-depreciation of rupee does not mean stability

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While the rupee may seem to have stabilised, Reserve Bank of India (RBI) deputy governor KC Chakrabarty says that non-appreciation or non-depreciation of rupee is not stability. 

 

Speaking on the sidelines of ConneXions 2013 at the Indian Institute of Management, Ahmedabad (IIM-A), Chakrabarty said that rupee depreciation in itself doesn't show that rupee is not stable. Rather, the depreciation should be in an orderly manner.

 

"When the rupee has to depreciate, it has to depreciate orderly. That is the meaning of stability. Stability does not mean that rupee will be at this particular level. What we are saying that if rupee has to depreciate or appreciate, it has to do so in an orderly manner, which is not happening right now. It goes to Rs 70 and then it comes to Rs 61," he added.

 

Hosted by IIM-A's post graduate programme for executives (PGPX), ConneXions is a two-day knowledge summit based on the theme 'INDIA INCubate: Ideas to Action'.

 

In his keynote address at the event, Chakrabarty said that too much discussion was happening on macro economics while the focus should be on micro economics. "We talk a lot about macro economics. Let us come back to micro economics and look to improve productivity and efficiency at the lowest strata of society."  The RBI deputy governor also emphasised on assisting SMEs to grow.  

 

"SMEs have ideas for their own business and not for each of the functions in finance, marketing, etc. Why don't business graduates start SME servicing centres not for one SME but for 100 SMEs in that area?" asked Chakrabarty.

 

Speaking further on the sidelines of the event, he said, "You cannot have only credit led growth. Currently, there is no equity in the system. People are not able to raise equity in the market. Debt alone will not bring in a solution. You have to generate equity also in the market." 

 

Talking about illegal gold imports, Chakrabarty said that gold coming into the country was not his concern and that it was for the government to arrest the situation of illegal imports. "My only concern is that the money shouldn't go outside the country," he added.