Mixed signals on rupee harming its defence: Traders

A record current account deficit and a slump in economic growth in recent years to the lowest pace in a decade have undermined confidence in the rupee.

MUMBAI: Mixed signals from the Reserve Bank of India and the government over how to handle the fall in the rupee has contributed to its decline, investors say. 

The RBI has appeared at times to contradict the thrust of its policy to try to stabilise the currency and also seemed at odds with the finance ministry, undermining market confidence in their resolve to tackle the problem, they say. 

"The contradictions between the actions and voices from the central bank and finance ministry have aggravated the volatility in the market," said Ganti N Murthy, head of fixed income at Peerless Fund Management Co Ltd in Mumbai.