Asserting that rupee price will bemarket determined, finance minister P Chidambaram today said last night's measures by the Reserve Bank have nothing to do with the upcoming monetary policy review and may not impact interest rates of banks.
RBI's measures, he said, were aimed at checking excessive volatility and speculation in the forex market.
"These measures (RBI decisions) should not be read as prelude to any policy rate changes. This has nothing to do with upcoming policy review of RBI...I don't expect banks to increase interest rates as a result of yesterday's measures" Chidambaram said at a press conference here.
RBI last night announced a slew of measures like raising cost of borrowing by banks by 2% to 10.25% and announcing sale of bonds worth Rs. 12,000 crore through open market operations to suck liquidity to check rupee slid, which had earlier in the month touched a all low of 61.21 to a dollar.
"Measures are taken to curb excessive speculation and reduce volatility and stabilise the rupee," Chidambaram added.
The value of rupee, he said, will depend upon "how much foreign exchange we earn and how much foreign exchange we spend".