The country needs to be extremely vigilant to check weakness in the rupee, and the task was to minimise volatility and avoid contagion to other macro policies, an official of the prime minister's economic advisory panel said on Friday.
Prime Minister Narendra Modi is set to meet officials on Saturday to decide ways to address the currency's weakness and rising fuel prices, though it was unclear whether the panel or any of its members would attend.
"The present challenge can be effectively dealt with," said Rathin Roy, in a blog, ahead of Prime Minister Narendra Modi's meeting on Saturday to consider steps to address weak rupee and rising fuel prices.
Panel member Rathin Roy, who heads National Institute of Public Finance and Policy, said that weak rupee was unlikely to lead to fall in imports due to strong demand, notably for crude oil and electronic items.
Despite strong economic growth, the rupee has weakened more than 11 percent to become Asia's worst performing currency this year, hit by higher oil prices and an emerging markets sell-off, widening India's current account deficit and tipping its balance of payments into the red.