"Depreciation in the rupee will have only a marginal positive effect on exports because the extent by which the depreciation would offset cost disadvantages to Indian exporters would be limited and so the margin adjustment requirement would be large", he said.
Current account deficit is a measurement of a country's trade where the value of its imports exceeds the value of its exports.
"We may not be able to achieve even 7% growth this fiscal (year)", he said.
India's January-March current deficit widened to $13bn from $2.6bn a year earlier.
Indian shares fell on Thursday, ahead of the expiry of derivatives contracts, as the rupee hit a record low and crude oil prices remained firm while lingering global trade war fears continued to hurt sentiment.
New Delhi feels that with forex reserves amounting to $410bn as of June 15, it could deal with the current storm.
A regular and increasing demand for dollars from banking institutions and importers, as well as oil refiners, which follows higher crude oil prices, are keeping the rupee under pressure. "We have adequate reserves, there is adequate firepower", Garg said.
The rupee has just hit a new all-time low.
"But he added: "While they can exercise control on the domestic markets, they will have little or no control on the NDF (non-deliverable forward) markets, which has been setting the trend post our market close".
However, some central banks have been forced to act to support their currencies, hiking interest rates to levels that threaten to slow their domestic economies.And Argentina has been forced to turn to the International Monetary Fund for help.
"I never thought the rupee would go down to this level", said Madan Sabnavis, chief economist at Care Ratings.
The rupee recovered from record lows set on Thursday morning aided by dollar selling intervention by the Reserve Bank of India but weak macro-economic fundamentals and broad dollar strength are likely to keep up the downward pressure on it. Rupee has also been under pressure because of rising oil prices and a U.S. threat to stop crude imports from Iran, India's third-largest oil supplier.
The Organization of Petroleum Exporting Countries' (OPEC) agreement to restrict their oil output by 1.8 million barrels of oil per day (bpd) saw crude oil prices rising to $80 per barrel last month for the first time since 2014.
A falling rupee and rising crude could exacerbate risks to inflation. Ahmad said that Indonesia's central bank may soon be forced to hike rates.