Coimbatore, Apr 20: Union Finance Minister P. Chidambaram told the business fraternity that appreciating rupee was only a temporary phenomenon.
Chidambaram inaugurated a textile park here on Saturday. Supported by capital inflows into the stock market the partially convertible rupee traded at 39.92 per dollar on Thursday. In the past week the rupee has moved in a range of 39.89 - 40.01, and the Reserve Bank of India (RBI) has repeatedly stepped in to stem the currency's rise. "The appreciation in rupee value and depreciation in dollar value is only a temporary phenomenon and will get normal. The industrialists need not worry about it and should change their policies and principles according to the situations," Chidambaram said.
According to data released on Thursday annual inflation dipped to 7.14 per cent in early April, compared with a more than three year high of 7.41 per cent in late March.
But traders said the data had little effect on the currency market, although some still expect the RBI to allow the rupee to appreciate to lower the prices of commodity imports, such as oil.
Experts say India was unlikely to meet the export target of 160 billion dollars for the fiscal year ended March 31, 2008 because of the rise in the value of the rupee.