With the rupee breaching the 64 to a dollar mark intra-day, Finance Minister P Chidambaram today held a meeting with top government functionaries, including Prime Minister's key economic advisor C Rangarajan.
Chidambaram is understood to have discussed the current economic situation in addition to the country's strategy for the upcoming G20 Leaders' Summit at St Petersburg next month.
Among others, the meeting was also attended by Planning Commission Deputy Chairman Montek Singh Ahluwalia, Economic Affairs Secretary Arvind Mayaram and Commerce Secretary S R Rao.
The meeting assumes significance in the backdrop of rupee continuing its declining trend and touching a low of 64.11 to a dollar in early trade today and Sensex slipping below 18,000 points during the day.
Chidambaram, who met top officials for the second day in succession today, may have also discussed the reform measures the government plans to take in the near future and steps that will bring back the economy to high growth path.
Finance Ministry sources said the rupee will have to find its "sensible level", without indicating what that level could be.
A sliding rupee, which is mainly on account of widening Current Account Deficit (CAD), will make imports costlier and fuel subsidy bill.
"We believe the currency will remain under pressure until the CAD narrows meaningfully, or capital inflows accelerate due to an improving growth outlook," Moody's Investors Service Analyst (Sovereign Risk Group) Atsi Sheth said.
Chidambaram had earlier said the current account deficit (CAD) would be brought down to USD 70 billion this fiscal from USD 88.2 billion in the previous year and steps would be taken to increase foreign fund inflows.
To restrict the outflow of foreign currency, the RBI had on August 14 announced stern measures, including curbs on Indian firms investing abroad and on outward remittances by resident Indians.