MUMBAI: India’s rupee firmed against the dollar yesterday, a day after a government advisor said steps were being taken to boost growth and reduce the high current account deficit.
The rupee — the worst performing currency this year among major Asian nations — rose to 58.66 against the dollar yesterday morning, up from its lifetime low of 61.21 hit earlier this month.
India’s chief economic advisor Raghuram Rajan told media Thursday that the government was taking measures to boost growth, stabilise the currency and lower the current account deficit.
The rupee slide comes when India’s economic growth is at its weakest level in a decade and the current account deficit, the broadest measure of trade, is at a record 4.8 percent of GDP.
The high deficit stems mainly from huge oil and gold imports and weak exports.
But Rajan said that there was “absolutely no intent to kill growth. We are trying to stabilise the currency in a way that does the minimal damage to growth.”
“A number of measures are being taken to get the growth going. We need to act directly on the current account deficit side,” Rajan said, according to The Press Trust of India.
This month the Reserve Bank of India raised short-term interest rates and announced liquidity tightening measures including lowering the amount banks can borrow or lend under its daily liquidity limit. AFP
