Amid sustained fall in rupee's value, the Plan panel today attributed the decline to volatility in the global currency market, but expressed the hope that the Indian currency would stabilise soon.
"It has been a period of enormous currency volatility and you are going to look at what has happened in the Indian currency market in the light of what is happening globally. I think it will settle down," Planning Commission Deputy Chairman Montek Singh Ahluwalia said in an interview to a television news channel.
Meanwhile, the rupee today plunged by 81 paise to close at nearly 33-month low of 52.15/16 against the US dollar.
"On the matter of the currency, it would be a very good idea for nobody to speculate. Even for the RBI, the sensible thing to do is to make whatever calls are necessary and let the market judge.
I wouldn't want to speculate on when and how and what. These are relevant issues but these are issues that the Reserve Bank of India (RBI) has to decide," Ahluwalia said.
The Indian rupee is the fourth most depreciated currency in the world and the most depreciated in the Asian continent.
The RBI has attributed the movement to demand-supply factors and said it is happening globally.
A weaker rupee is a matter of concern for India as it depends on imports for over 70% of its oil and gas requirements and the depreciation of the local currency has made imports more expensive.
The depreciation of the rupee comes at a time when the headline inflation has remained above the 9%-mark for 11 consecutive months.
Asked about the RBI's policy of not intervening in the market so far, he said, "I think the RBI is the agency responsible for exchange rate management, so I don't want to second guess what they say. There is nothing surprising in what they have said. We are not targeting any particular rate."
He said the policy that is being followed is to ensure that the "exchange rate should be market-determined, but the RBI stands by to intervene if it finds that conditions have become too disorderly. So that's really the RBI's call."
Pointing to global events, he said that with multiple currencies moving up and down, it is not clear what should be a stable rate of exchange.
He added that the recent decision to enhance FII investment limits in the bond market is a positive one.
"For a long time, it's been felt in India that while we should limit the exposure of our corporates to foreign- denominated debt, we need not be so concerned about that exposure as long as the debt is rupee-denominated.
"So this was in fact just a move in the right direction and very much in line with what the government has been talking about earlier," he said.
