In an attempt to soothe jittery nerves over declining valuation of the Indian currency, the economic affairs secretary, Arvind Mayaram, has said that country's economic fundamentals were very strong and there was no cause for concern. He highlighted that the country’s current account deficit (CAD) was expected to be below $50 billion and foreign exchange reserve at an all time high level.
Mayaram further said that he did not believe the rupee would tumble and track steep falls in the Argentina peso. All the emerging market currencies from Brazil, Russia, South Africa and Turkey off lately have been on depreciating streak as global investors continue buying dollars after Argentina allowed its currency to weaken because its foreign exchange reserves were at a seven-year low.
On RBI’s recent decision to withdraw pre-2005 currency notes, Mayaram underscored that it was not an effort to tackle black money which is a complex thing and something which cannot be termed a demonetization of currency notes. Rather he clarified that RBI’s real motive behind this move was withdrawal of a series of notes which have fewer security features.
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