Kolkata, July 7 (IANS) India Inc is suffering from sharp rupee depreciation against the US dollar, but should be “realistic” about the Indian currency’s fall and learn to live with a rate of around Rs.50 per dollar, chief economic advisor Kaushik Basu said Saturday.
“Rupee volatility at Rs.56-57 (to the dollar) is not desirable. But, you have to be realistic. The days of Rs.46/Rs.47 (rate) has gone. It will be Rs.50 or belowlow 50. But we have to live with that,” Basu said at a programme organised by the Bharat Chamber of Commerce here.
He said although rupee was depreciating too much, India’s apex bank, the Reserve Bank of India, could not resort to sale of too much dollars to prevent a sharper fall in rupee as there was a tendency to panic if foreign exchange reserves dipped.
He said Indian entrepreneurs should take this opportunity of rupee depreciation to export more.
“Service sector export is doing very well, but manufacturing goods export was not any way near to its potential. Increasing export is essential in managing the current account deficit,” he said.
Expressing concern over the high current account deficit, Basu said the prevailing deficit of 4.2 percent of the country’s GDP was the highest that India ever had.
He said wholesale price index was expected to come down in September this year from the present 7.5 percent.
“Inflation is now at 7.5 percent. However, in another two to three months there will be some softening,” Basu added.
