While a sharp drop in oil prices should help the slowing economy and the rupee, concerns will also persist over sluggish domestic demand which weighed more heavily on July-September growth than expected.
The rupee traded firm against the US currency despite a firm dollar overseas, signalling a change in sentiments of forex speculators, analysts said.
Babbar made the controversial remark while addressing a rally in poll-bound Madhya Pradesh's Indore city on Thursday. Madhya Pradesh goes to polls on November 28 and results will be declared on December 11.
This is the seventh straight session of gains for the domestic unit amid the US dollar weakening against some currencies overseas. In the last seven trading sessions, the rupee has gained a healthy 220 paise.
The rupee is the worst-performing emerging market currency losing over 15 percent year-to-date, while in the first half it averaged at 68.57 to the dollar, down 8.3 percent year-on-year, making the depreciation at a five-year high so far, says an India Ratings report.
The opposition led by the Congress has been accusing the government of benefiting Anil Ambani's Reliance Defence Ltd. from the Rafale deal. The government and Reliance Defence have dismissed all the allegations as false.
While the stock market benchmark Sensex in the early trade crashed over 1,000 points, the rupee fell to a record low of 74.45 to a dollar.
The remarks by Martin Rama, the Chief Economist for the South Asia region of the World Bank, came as the rupee hit an all-time low of 74.45 against the US dollar on Thursday.
After seeing a stronger opening at 73.87/USD, selloff on the back of steadily rising crude prices along with other factors weighed on the currency.
The rupee collapsed to a fresh low of 73.77 against the US dollar Thursday, as global oil prices continued to rise, deepening concerns about the current account deficit and capital outflows.
The meeting will deliberate upon ways to address India's trade deficit in goods and pressure on the rupee, the official added.
The rupee started off day at 72.47 to the dollar against Friday's close of 72.20 a dollar.
According to Dun & Bradsteet's latest economy forecast, elevated crude oil prices, strengthening of dollar, geopolitical tensions and economic sanctions will continue to impart depreciation pressures on the rupee.
The rupee had fallen more than 11 percent against the dollar this year and is the worst performing Asian currency. It was trading at 72.40 to the dollar, compared with Monday's close of 72.51.
Lower support for the rupee is at Rs 70.50 and medium-term bias (for next 1-2 months) remains bullish above the same with test of the ‘Cup & Handle’ target of 74.20 looking likely, says Navneet Damani of Motilal Oswal Financial Services.
The rupee corrected more than 13 percent year-to-date and around 5.5 percent in last one month.
The rupee has fallen by nearly 15 percent against the dollar this year, and touched a new record low of 72.66 on Monday.
The Nifty IT index rose half a percent, taking total year-to-date gains to more than 38 percent as the Indian rupee depreciated 13 percent in current year so far.
The rupee has depreciated by about 13 percent so far this year, 5 percent in the last one month and 3 percent in last seven straight sessions. It has fallen from 70 to 72 against the dollar in 21 sessions.
"With growing concerns about Emerging Market (EM) contagion, risk appetite for Asian assets may remain very selective in the near-term," OCBC Bank in Singapore said in a note.
Xiaomi, which is a leading player in India with about 30 percent share of the country's smartphone shipment, has launched three new models of its Redmi devices that take into account the recent fall of the rupee against the greenback.
In its research report 'Ecowrap', SBI said given the "inefficacy" of sterilised intervention, RBI may follow a relatively hands off policy in forex market for now.
"The BJP came to power on the promise of controlling inflation but despite favourable global conditions nothing was done by the government," Pilot said in a statement here.
Addressing a 'Samajik Pratinidhi Baithak' organised by UP BJP's Backward Cell, Maurya said, "During the Congress government's stint, only 15 paise out of one rupee used to reach the beneficiary.
In a tweet, she said, "Rupee suffering from low fever. Petrol and diesel prices highest ever. Foreign Exchange Reserves have fallen by $21.84 billion between March end and August 3."