New Package Will Result In Stability, Says Chidambaram Backs

Finance Minister P Chidambaram yesterday endorsed the RBI package to stem the rupees decline. In a press statement, he said that the central banks steps would bring a considerable degree of stability to the forex market. The RBI has maintained a close watch on the behaviour of the rupee. I fully support the package. I believe that it will bring about more stability. The rupee has come under some pressure, once again, in the last few days. It is obvious that the turbulence in the S-E Asian markets is spilling over. He said the rupees correction has to be seen in terms of the real effective exchange rate indicators which adjust for the differences in the inflation rate. Taking 1993-94 as base year in REER terms, the rupee had appreciated by about 9 per cent since July 1997. Since then, a correction has taken place and it has depreciated by the same order.