Mumbai: State Bank chairman Arundhati Bhattacharya Monday described the massive fall in the rupee as "driven by apprehensions" about the crisis in China and asserted it does not indicate any fundamental issues with Indian economy.
"The current strain on the rupee is triggered by global issues as there are some amount of apprehension as to where China is going. Obviously it'll take a little time before we get the floor.
"It'll depend on how other nations, and their central banks are reacting to it," she said when asked about her views on the rupee fall.
She was quick to add that if the bloodbath on the forex market is "triggered by facts then it is much more difficult to stop. But I do believe that this is more triggered by apprehension (over China) than facts."
Following a bloodbath in the markets, wherein the stock indices fell like nine pins, marking their biggest single-day fall ever, losing nearly 6 per cent, the rupee plunged 82 paise to 66.65 to the dollar.
The rupee crashed below the 66-mark by falling 90 paise to close at a two-year low of 66.73 (intra-day) due to heavy demand for the dollar from importers and some banks.
On a Manic Monday, the Sensex took the bloodiest blow of its lifetime, crashing 1,624.51 points to close 5.94 per cent down at 25,741.56 while Nifty cracked below 7,900-mark by tanking 490.95 points, or 5.92 per cent, to 7,809.
Total investor wealth, in terms of cumulative market value of listed stocks, plunged by nearly Rs 7 trillion and fell below Rs 100-trillion mark to end at Rs 95,28,536 crore.
Stating that fundamentals of the economy are strong, she said, "Investors will learn to make distinctions between the various countries depending on their strengths. And then they will find that India is actually in a very good spot, it's in a rather sweet spot, given the fact that all of our parameters, the macro parameters are all well."
She based her optimism on "tremendous transparency in our markets, because as a country we can generate huge amount of demand and therefore going forward I think most investors will understand that and come back in. Ultimately, the money that is going out has to come back into somewhere."
Asked whether SBI was asked by the government to help it successfully complete the 10 per cent stake sale in Indian Oil, she quipped "where is the question of helping. It is a good stock and it will give me good returns. Where will you get IOC at these prices. Today, IOC is a great stock because there is no subsidy problem."
