RBI should adopt 'optimal path' on Rupee, says FICCI

New Delhi, Apr 21 (UNI) With the Indian Rupee firming up against the US dollar, industry body FICCI today came down heavily on the Reserve Bank of India and said the central bank should ''avoid too much of meddling in the government policies'' and let the rupee operate naturally.

''The rupee has appreciated nearly 10 per cent against the US dollar and the RBI should wave off it maximal approach and resort to an optimal path,'' FICCI Secretary-General Amit Mitra said in an exclusive interview to UNI.

Dr Mitra said the RBI can save the situation by ''mopping up with the infrastructure bonds''.

Mr B B Bhattacharya, Vice-Chancellor, JNU, and economist also believes that too much of interference by the central bank is not desirable.

''Rupee is market determined and too much of meddling by the bank is not good. However, if there is speculatory volatility then the RBI should regulate the exchange rate to maitain a steady path,'' Mr Bhattacharya said.

The Rupee appreciation reached a nine-year high of 41.90 per dollar earlier this week. The upsurge was seen despite the intervention by the RBI.

The strengthening Rupee, though offers comfort to Indian importers, allowing them to import at lower costs, it disappoints Indian exporters as they receive lower Rupee funds against their dollar income. Thus, stronger Rupee carries the risk of widening trade deficit with it.

UNI