Finance Ministry not in favour of exhausting forex reserves to defend rupee

"It (rupee) should fall, otherwise the trade-rated exchange rate will become uncompetitive," the official said

Amid fast-depleting forex reserves, the Finance Ministry on Wednesday signalled that it was not in favour of selling the dollar to defend any particular level of the rupee.

“Let it (rupee) reach whatever levels it has to reach. We can’t fritter away reserves on defending some artificial, imaginary rate of exchange,” a senior finance ministry official told Business Standard.

On Wednesday, the Indian rupee hit a fresh record low against the dollar to close at 81.94, after slipping 36 paise amid fears of the US Fed staying the course of aggressive monetary tightening.

Forex reserves declined to a near two-year low of $545.65