Indian minister says currency panic ‘unwarranted’ after injecting billions of rupee reserves to banks

NEW DELHI, August 22, 2013 (AFP) – India’s finance minister said Thursday that intense selling pressure on the rupee was exaggerated and that the currency market “panic” was unnecessary. The rupee, which has hit record lows for five straight trading days, slumped to 65.56 to the dollar on Thursday as uncertainty about the future of the US stimulus programme added to growing fears about the state of the Indian economy.

The rupee has lost about a fifth of its value this year and there are doubts over whether policymakers are in control of the situation. “The panic that has gripped the currency market is unwarranted,” P. Chidambaram told a press conference.

“It is almost universally accepted that the devaluation has overshot the reasonable and appropriate level,” he added.