More steps to stabilise rupee coming |
India`s finance minister Arun Jaitley promised more steps to stabilise the rupee and narrow the current account deficit (CAD), assuring businesses that the government would be agile in its response to global trends shaping the economy, which, he said was underpinned by solid fundamentals supporting annual growth of around 7.5%. He said the depreciation in the rupee and the high CAD were transient factors that had indeed affected India, but that these fell short of impacting capital flows of a long-term nature such as foreign direct investment (FDI). The minister`s assurance of more policy measures comes in the wake of the domestic currency weakening beyond 74 on Oct 5 against the dollar after the Reserve Bank of India decided to keep policy rates steady, belying expectations of a rate hike in some quarters. The rupee recovered some of the lost ground in the inter-bank foreign exchange market on Friday to close trading at 73.77, down 18 paise from its previous close.Prices of crude oil — India`s biggest import -- have risen more than 10% since August, a factor likely to drive headline inflation. “The way oil prices have been going up, there has been some adverse impact on the CAD. Experts warned the worst may not be over as far as rupee weakness is concerned.
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