With the rupee depreciating to a new 32 month low against the US dollar, Mr Pranab Mukherjee finance minister of India said the Reserve Bank is keeping an eye on the situation.

Mr Mukherjee on the sidelines on the Vatsalya Mela 2011 told reporters that "The RBI is keeping an eye on it (depreciation of rupee). They are watching the situation at the appropriate level.”

His comments came a day after the Indian rupee plunged to a 32 month low below INR 51 per US dollar on persisting demand for the US currency from banks and importers.

The market was abuzz with speculation that the RBI has asked public sector banks to release dollars to arrest the fall of the rupee.

Asked what would be a comfortable rate of exchange and the likelihood of intervention by the central bank, Mr Mukherjee said that "I am not guessing anything and I am not finding what is comfortable level. I am depending on the advice of the RBI."

The Indian rupee is the fourth most depreciated currency in the world and the most depreciated in the Asian continent.

The RBI has attributed the movement to demand-supply factors and said it is happening globally.

(Sourced from PTI)