New Delhi: Finance Minister P Chidambaram on Wednesday allayed fears of huge volatility in the forex market after fall of the rupee against the dollar, saying the Indian currency is stable in terms of real effective exchange rate and is likely to appreciate.
"It is quite likely that the rupee will appreciate. We should not forget that the rupee was 47 (against the dollar) in 2003 also," Chidambaram said after the rupee fell to a three-year low of Rs 46.93.
He said the rupee value reflects demand and supply conditions in the market.
The Indian currency touched a three-year low of Rs 46.82 against the dollar as global crude prices hovered near record highs and the dollar remained higher in the overseas market.
However, the rupee bounced back on Tuesday due to some dollar selling by state-owned banks and ended at 46.70/71 against the US currency.
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