NEW DELHI: The Central bank is not able to arrest Rupee's downward slide if it is caused by weak fundamentals or global factors but can only take more calibrated steps in the forex market in such a scenario, as expressed by RBI Deputy Governor K C Chakrabarty.
On the sidelines of an HR summit of the state-run banks here, Chakrabarty said, “If the rupee fall is due to fundamental weakness of the economy, or due to global factors, then the RBI cannot support it.”
He also added that the government should address trade deficit issues if the fall of the rupee is due to weak fundamentals.
“If the rupee is depreciating due to real sector issues, financial sector measures will not solve it,” Chakrabarty added.
The Deputy Governor also hinted the plans to open a separate dollar window for oil companies, as a measure to contain dollar demand and help support the rupee.