But it  BIS central bankers’ speeches  1  refused to go away, and my old colleagues at the finance ministry thought it worth a try as the crisis of confidence worsened. I too became more favourable after thinking carefully about it. First, I weighed the balance of risks.
If we did not move the rupee back to fundamental value, every 1 rupee rise in the dollar-rupee rate would costs us Rs 40,000 crores more in import costs. Assuming the rupee was undervalued by Rs 3 for a couple of years, this would mean a loss of lakhs of crores to national income.