Economy May 23, 2012
New Delhi: With rupee breaching 56 level against the dollar, chief economic advisor Kaushik Basu today said the exchange rate problem is "bit of a bubble" and has nothing to do with domestic policies.
"...the current exchange rate problem that you are seeing, the very sharp depreciation that is taking place, I don't think it really has anything to do with our policy or policy mistakes being made over here, which is causing that," Basu told CNBC-TV18.
He pointed out that currencies of several emerging economies-like South African rand, Brazilian real and Mexican peso-all are moving very much like the rupee.
The CEA also said that the rupee is not the worst performing currency.
"The exchange rate problem that you are seeing is probably a bit of a bubble. I do think it's a bubble but it's not an India specific bubble. There is something global going on," he said.
On economic slowdown, Basu said there was a global factor but there were also domestic factors.
"I wish we were taking faster decisions, more reforms, but I also see it from within. When I see it from within, I also realise that with key players and the big decision makers in government all really waiting to take these moves, you also see the frustrations of democratic coalition politics, that things get stalled even when we want to do them," he added.
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