Markets stabilise on talk of measures to tackle rupee slide

NEW DELHI/MUMBAI: After being battered for several days, the rupee staged a smart recovery late on Wednesday on the back of talk that the government may unveil measures to tackle the slide in the currency over the weekend.
Calm returned to the stock market as well, with the Sensex gaining 305 points to close the day at 37,718 points. The robust growth of nearly 20% in the country’s exports in August also helped boost the rupee’s sentiment.
In early trade on Wednesday, the rupee touched a new lifetime low at 72.92 to a dollar but recovered to 72.19.The recovery started after a government official told reporters that the government was working on a package to stabilise the rupee.

Comments by economic affairs secretary Subhash Chandra Garg also helped restore order in the financial markets.
“No fundamental rationale for rupee to depreciate to levels we saw till yesterday. It reflected overreaction of market operators. Government and RBI will do everything to ensure that rupee does not slide to unreasonable levels. Today’s correction seems to reflect that realisation,” Garg tweeted.
A spate of solid economic data later in the day added to the cheer. Retail inflation slowed to a 10-month low of 3.7% in August while industrial output growth remained above the 6% mark at 6.6% in July.