The Reserve Bank cannot arrest the rupee's decline if it is caused by weak fundamentals or global factors, but can only take more calibrated steps in the forex market in such a scenario, RBI deputy governor K.C. Chakrabarty said today.
The government must address trade deficit issues if the fall of the rupee is due to weak fundamentals, he added.
"If the rupee is depreciating due to real sector issues, financial sector measures will not solve it," Chakrabarty said.
The rupee has been losing value against all the major currencies, especially the US dollar, since April. It has shed nearly 24 per cent year-to-date.
As a measure to contain dollar demand and help support the rupee, Chakrabarty also hinted at opening a separate window for oil companies.
"The option (of opening a separate dollar window for oil companies) is open. Whether they (RBI) are doing it or not, I don't know, because it will not be done in the public view," he said.
As the rupee loses ground almost every day against the US dollar, with the hands of RBI tied in view of depleting forex reserves, there have been talks of directly selling dollars to oil companies—the biggest consumers of the greenback—by opening a separate window for them.
The move can take off the demand pressure from the open market for the dollar.