Re appreciation cause for concern: FM

The government is "concerned" over the rapid appreciation of the rupee against the US dollar and the central bank may have to intervene if there is "disorderly movement" in the exchange rate, union finance minister P Chidambaram has said.

"Our exchange rate has a symbiotic relationship with the exchange rate of the US... The rupee is stable against the Euro and many other currencies. It is only against the dollar the rupee has appreciated by nearly 
10 to 10.5 % in the last eight to nine months," he said.

The policy is to allow two-way movement of the rate, but the only concern is that the movement should be "orderly", he said at an interactive session at the Peterson Institute for International Economics here.

"Neither the government nor the central bank has a view on the exchange rate. This is market-determined and it will be market-determined; but if there is volatility or any disorderly movement I suppose the central bank will intervene using whatever instrument it has. The government does nothing on that behalf," the minister said.

The rupee's real and nominal effective exchange levels are "way beyond comfort levels" at the moment, but "that is something we have to learn to live with", he said.

"Unless the US government does something about the dollar, there is nothing much I can do about the rupee, as far as the rupee-dollar parity is concerned," Chidambaram said.

"But without being frivolous let me say we are concerned about this rapid appreciation of the currency," the minister remarked.