RBI to take steps to arrest rupee fall: Subbarao

RBI Governor D Subbarao, in his interaction with media after the board meeting, also hinted at the possibility of issuance of overseas sovereign bonds to deal with the balance of payment situation.

"RBI will do whatever is necessary. Some structural changes are necessary for improvement in current account. Meanwhile, the RBI is monitoring the situation and we will do whatever is necessary, consistent with our policy," he said.

Direct sale of foreign exchange to oil marketing companies, Subbarao said, "has been an issue on the table. I am not ruling it out. I am also not saying that we are going to do it right know. It's an open issue. We have done it in past. At the moment, we have not done it so far."

Several experts, including C Rangarajan, the chairman of the Prime Minister's Economic Advisory Council (PMEAC), have suggested that RBI should consider selling foreign currency to oil companies as they withdraw huge amounts to buy crude in the international market.

As regards the sovereign bonds, RBI chief said, "I cannot say in favour or out of favour. We have done it in the past, it might be done in the future... But it's not something that is being contemplated right now."

India in the past had raised funds from overseas markets from issues like Resurgent India Bonds to tide over the balance of payment problems.

After losing ground three days in a row, the rupee today touched its lifetime low of 56.38 to a dollar but recovered to close at 55.65 after Subbarao's press conference. MORE