Rupee volatility: Chidambaram discusses current economic situation with bankers

Finance Minister P. Chidambaram held meetings with Foreign Institutional Investors (FIIs) and top bankers here today in an endeavor to reach out to market participants in wake of the rupee volatility.

According to reports, Chidambaram held a closed-door meeting with the bankers and discussed the current economic situation.

ICICI Bank's Chanda Kochhar, HDFC Bank's Aditya Puri, StanChart India's Anurag Adlakha, State Bank of India's Pratip Chaudhuri, Pramit Jhaveri of Citigroup India, Vijayalakshmi Iyer of Bank of India and Canara Bank chief RK Dubey among others met Chidambaram, who was accompanied by top officials from the Finance Ministry.

Chidambaram had earlier on Thursday assured that growth will pick up in the second quarter of fiscal 2013-14, and added there is no cause for panic because of the rupee's freefall against the U.S. dollar.

"Revival of growth will continue to be the focus of the government and the stability will return soon. There is no reason for excessive or unwarranted pessimism," he said.

Chidambaram said the government has no intention of introducing capital controls and reaffirmed the government's commitment of containing fiscal deficit to 4.8 per cent.

He said measures are being taken to reduce the current account deficit.

"Current Account Deficit will be contained at 70 billion dollars and the government will reaffirm this commitment to markets and stakeholders," he said.

Chidambaram further said that recent measures to control speculation in rupee will be reversed once stability returns.

"Virtually every emerging market seems to be facing the same problem. Rupee is undervalued and has overshot an appropriate level and the capital inflows will correct rupee level in due course," he added.

The Indian rupee plunged over 2 per cent to hit an all-time low of 65.50 against the dollar on Thursday. The partially convertible rupee surpassed the previous record low of 64.55 hit on Wednesday.