FM discounts voltaility in FOREX market

New Delhi, July 19 (UNI) In a sharp reaction to the rupee touching a three year low ending past Rs 47 per dollar, Finance Minister P Chidambaram today discounted extreme voltaility in the FOREX market and expected the Indian currency to appreciate with the change in market conditions.

''The rupee's downward movement is reflective of the demand and supply conditions,'' Mr Chidambaram told reporters, adding that it could appreciate if the market conditions change.

The Finance Minister, however, said ''in terms of real effective exchange rate the currency is stable.'' ''It is quite likely that the rupee will appreciate. We should not forget that the rupee was trading at Rs 47 to a dollar in 2003 also,'' Mr Chidambaram said.

The Greenback has been cosolidating strong gains against major international currencies with global crude prices hovering near a record high price of Rs 77 a barrel, creating a stupendous demand for the dollar.

The Indian currency touched a three year low of Rs 46.93 to a dollar and the shares tumbled.

The rupee moved up yesterday ending at Rs 46.70 per dollar after government-run Banks stepped in to restore normalcy and the rupee ended at Rs 46.70 per dollar.

UNI GS VJ RK1916