India needs to be extremely vigilant to check weakness in the rupee and the task was to minimise volatility and avoid contagion to other macro policies, a member of the prime minister`s economic advisory panel said on Friday.

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"The present challenge can be effectively dealt with," said Rathin Roy, in a blog, ahead of Prime Minister Narendra Modi`s meeting on Saturday to consider steps to address weak rupee and rising fuel prices.

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Despite strong economic growth, the rupee has weakened more than 11 percent to become Asia`s worst performing currency this year, hit by higher oil prices and an emerging markets sell-off, widening India`s current account deficit and tipping its balance of payments into the red.