EAC-PM member calls for extreme vigilance on rupee

A member of Economic Advisory Council to Prime Minister (EAC-PM) Friday called for extreme vigilance on the rupee front, saying it has depreciated against dollar outside reasonably acceptable parameters of 4-6 per cent per annum.

The rupee breached the historic low of 72 level this week, marking year-to-date losses of more than 13 per cent.

It, however, recovered today by 50 paise to 71.68 against the dollar in morning trade in the forex market on the government's assurance that all steps would be taken to ensure the domestic currency does not depreciate to unreasonable levels.

"It is reasonable to expect the Indian rupee to annually depreciate by 4-6 per cent against the dollar.The recent depreciation outside these parameters...," Rathin Roy, the EAC-PM member, said in a blog ahead of the Prime Minister's meeting on Saturday to take stock of the health of the economy.

The recent fall in the rupee, he said, could be on account of