SINHA RULES OUTRATE HIKE TO PROP UP RUPEE 

New Delhi, Aug 18 :     Finance minister Yashwant Sinha today admitted in Parliament that the depreciation of the Indian currency could mean a ballooning of the country's oil bill which he described as the 'only worrying factor.' Even as the rupee has had a 5 per cent free-fall against the dollar, global oil prices have shot up to a decade's high of $ 32.75 a barrel. Unless oil prices come down again this could mean an almost doubling of the country's oil bill, according to analysts. Sinha, who was answering a calling attention motion on the depreciation of the rupee, however ruled out any further hike in the Bank Rate to correct the value erosion of the Indian currency. Bank Rate has already been increased by hundred basis points to try stabilise the battered rupee. The minister tried to explain the sudden depreciation of the rupee stating it was 'temporary and manageable' and there was no cause for panic. 'It is a temporary phenomenon,' he told the lower house, adding 'though the situation is difficult, there is no cause for worry as our economic fundamentals are strong and the country has enough foreign exchange reserves to meet seven-month imports.' The country's reserves had shot up by $ 9 billion during the BJP government's tenure and though it had dipped marginally since a high of $ 38 billion in March this year, forex reserves still stood at about $ 36 billion. Sinha ruled out the possibilities of analysts' predictions that the rupee would touch an exchange rate of 50 to a dollar, coming true. Rupee rallies to 45.80 The rupee today staged a smart rally from an intra-day low of Rs 45.95/96, to finish at Rs 45.79/80 to a dollar, following unwinding of long positions by banks coupled with dollar sales by exporters. The unwinding of dollar positions was triggered by unconfirmed reports about RBI making enquiries with banks as to the main dollar buyers in the market. Further, with dollar supplies expected to increase as a consequence of the RBI measures early this week, sales of the greenback were also witnessed among the exporters.