The rupee dropped to a record low of 61.80 against the dollar today and recovered to end with an 11-paise gain at 60.77.
"In the short term, there should be measures to take corrective actions. Also, there should be actions to prevent speculative activities and watch the behaviour of the rupee," Rangarajan said.
Raghuram Rajan, Chief Economic Advisor in the Ministry of Finance, who was appointed today as the next RBI Governor, said: "The government will take some more measures to stabilise the rupee soon."
Rangarajan said the decline in the value of the rupee is a reflection of capital flows and strong demand for the dollar.
"Though the rupee subsequently recovered today, it is a partial reflection of what is happening on the dollar side and capital inflows in general that the value of rupee has depreciated," he said.
The fall in the rupee, he said, is largely attributed to external factors, which began with the reaction to recent comments by US Federal Reserve Chairman Ben Bernanke.
"It all happened with the Federal Reserve Chairman's remarks recently, which were interpreted in a different way. This caused not only Indian rupee but also all emerging market currencies to fall," he said.
Bernanke had said the US Fed may start scaling back the quantitative easing programme, which has helped the dollar to strengthen globally.
On July 8, the rupee had touched its previous intra-day low of 61.21 due to large capital outflows on the back of strong dollar demand.