Rupee is now at its real value, says Arvind Mayaram

With the rupee firming to 60.9 against the US dollar, Economic Affairs Secretary Arvind Mayaram said it has reached its real value.

The rupee had touched a life-time low of 68.85 against the dollar in the last week of August after the US Federal Reserve started discussions on tapering its fiscal stimulus.

"The rupee is now at its real value," Mayaram told reporters. He, however, cautioned that "there should be no exuberance".

The domestic currency on Monday extended its rising streak for the fourth straight day, appreciating by 51 paise to trade at nearly four-month high of 60.90 against the dollar in early trade.

The sentiment was boosted on sales of the US currency by banks and exporters and sustained foreign capital inflows. Besides, a higher opening in the domestic equity market, where the Sensex soared to an all-time high after BJP's victory in state Assembly elections, and strengthening of other currencies against the dollar overseas, also supported the local currency.

A record current account deficit (CAD) on back of high gold imports has been pressuring the rupee for long. However, there has been significant improvement on the front as the deficit narrowed to $5.2 billion or 1.2 per cent of GDP in the second quarter of the current fiscal. The deficit was at $21 billion, or 5 per cent of the GDP in the same period of last year.