Raghuram G Rajan, Chief Economic Adviser, Ministry of Finance assured that the government will continue to implement measures to ease foreign investor portfolio inflows and some will be done very shortly.
He also said that the government continues to undertake measures to ensure the current account deficit (CAD) is safely financed. In the coming weeks, the government will be recommending the policies to enhance FDI limits in a number of areas. All this will help not just in the short term objective of financing the CAD but also in the longer term objective of ensuring sustainable growth, he said.
He said this in an official communication following the recent depreciation of rupee against the dollar. He said the fundamentals for India are improving, even while many parts of the world are still stuck in recessionary conditions.
The exchange rate has depreciated about 5.5 percent since January 1, 2013 at par with Korea, Turkey and Brazil and much less than South Africa. Clearly a large part of the decline in the value of the rupee in recent days is because of dollar strength, Rajan argues.
Emerging market currencies across the world have depreciated as debt outflows have increased, following the FedÂ’s suggestion that its asset purchases may be tapered down in September, he said.
Leave a Reply
You must be logged in to post a comment.