Chidambaram downplays fall in rupee

Finance Minister, Palaniappan Chidambaram on Friday said there was no need to 'react and panic' over rupee's fall, a day after the Indian currency hit an all-time low against dollar.

The rupee had slumped to a record low of 59.98 to the dollar on Thursday, following the U.S. Federal Reserve's statement on its plan to wind down the monetary stimulus.

"My request is, we should not react and panic. It's happening around the world, but obviously that money which has been pulled out from all the emerging markets would ultimately have to find a place. We are watching the situation; RBI (India's federal bank, Reserve bank of India) will take whatever action it has to take," said Chidambaram.

The rupee has been one of the worst performing currencies in Asia following a global sell-off triggered by fears that the U.S Fed might start tapering off its support for the economy.

Meanwhile talking about the shortfall in the domestic coal requirement for various thermal power plants in India, Chidambaram also announced special measures which would be undertaken to ensure that power producers get enough coal supply.

"Coal India Ltd. (CIL) to sign Fuel Supply Agreements (FSA) for a total capacity of 78000 MW including cases of tapering linkage, which are likely to be commissioned by 31.03.2015. Actual coal supplies would however commence when long term Power Purchase Agreements (PPAs) are tied up. Taking into account, the overall domestic availability and actual requirements, FSAs to be signed for domestic coal quantity of 65 percent, 65 percent, 67 percent and 75 percent of Annual Contracted Quantity (ACQ), for the remaining four years of the 12th Five Year Plan," Chidambaram said.

The measures come in the wake of recent scams which has hit the ruling government in India.

The scams have been dubbed by the media as Coalgate since March 2012, after reports clearly indicated that coal fields were allocated without a transparent bidding process, causing a loss of $33.4 billion to the public exchequer.

Prime Minister Manmohan Singh, who was holding the ministry from 2006 to 2009, had denied any wrongdoing and pointed out that it was his government that proposed competitive bidding.

Singh's government has struggled to defend itself against allegations that it awarded coalfields potentially worth billions of dollars to private and state power, cement and

steel companies in a process that was corrupt at worst and lacked transparency or any element of competition at best.

Earlier this year in May, Law Minister Ashwani Kumar quit after the Supreme Court said the government substantially changed a report by the federal police, Central Bureau of Investigation (CBI) on accusations of irregularities in the award of mining rights.