NEW DELHI: The issue of value of Indian currency in the international foreign exchange market has been touched by the editorials of two leading Indian dailies Thursday both the papers make a strong plea to go a step further than the partial convertibility of rupee introduced in he federal budget presented by the finance minister Manmohan Singh last Saturday.

The economic times says that it is a commentary on the strength of Indian economy that the free mare rate of rupee on the first day of official trading closed at not more than Rs29.15 to the dollar, whereas two months ago the dollar fetched Rs 36.

While congratulating the finance minister for opening up Indian economy, the editorial says that partial convertibility is “Less than radical and adds that it is a logical extension of the exam scrip scheme,

“The rise in the exchange rate for formerly open general license (OGL) and capital goods seems to have compensated for import duty cuts in so many cases that Indian industry is as protected today as before the reform package, the paper observes.

The future condition of foreign exchange reserves of India will depend upon a number of factors, including the aid by non-resident Indians and international agencies and revival of Indo-Russian trade, the paper opines,

“The tribune in it editorial led “rupee scotches rumors say that has been partially unshackled and forced to stand on its own against the mighty dollar.

In the days to coo, the value of the Indian currency may dip to a more expected level, the paper says. The reserve Bank of India has also said that it could intervene in the market i the rupees exchange rate goes above Rs 35, the paper adds.

“The fact that the RBI fixed band in somewhat scientific way, is brought about by a few supporting points, the paper observes. The gap between demand and supply of the dollar is about 30 per cent and hence it is reasonable believe that this percentage will reflect in the open market rate as compared to the official rate of about Rs 26, the paper says.

However, partial convertibility of rupee has been introduced at an awkward moment and hence proves to be troublesome 0 handle, the paper opines.

Article extracted from this publication >> March 20, 1992