The rupee slumped to a record low of 68.75 per dollar and shares tumbled on Wednesday on growing worries that foreign investors will continue to sell out due to stiff economic challenges and volatile global markets.The currency later recovered to trade at 67.90 in late afternoon trade, while the Sensex also turned.
Speaking to reporters in New Delhi, Mayaram said that "the irrational sentiment in the markets will correct itself. There is no need to panic". He also said that there was no plan by the government or the Reserve Bank of India (RBI) to ban trading in currency derivatives.
Forex futures trading has been partly blamed for the tumble in the rupee over the past month or so and while it is not illegal, there have been concerns that the RBI will come down heavily on currency speculators.
The FM has repeatedly said the current account deficit will be contained at $70 billion, or 3.7% of the gross domestic product (GDP). This so-called 'red line' stems from the belief within the government that the trade deficit for the year will be contained at $186 billion, with gold imports falling to $38 billion from $53.6 billion last year.