Finance minister P Chidambaram and top government officials met foreign institutional investors (FIIs) and top bankers on Saturday to address their concerns about the economy and discussed ways to improve capital flows into the country to shore up the falling rupee. The government is likely to announce more measures to increase fund flows to strengthen the rupee over the coming days.
“All measures to attract fund flows are under consideration. I think you should see something coming up shortly, say within a week or in the next 10 days,” financial services secretary Rajiv Takru told reporters after the meeting.
The rupee, which rebounded by amassive 135 paise last Friday, may continue to gain this week as investors hope government and Reserve Bank of India will make more efforts to stabilise the market, say treasury heads of banks.
The domestic currency, which touched an intra-day low of 65.56 on August 22 on fear that the US Fed was on course to taper off its monthly asset purchase programme, recovered sharply on August 23 to end at 63.20 after the pep-talk by the finance minister on CAD and fiscal deficit.
“The rupee should continue with the Friday’s trend of appreciation this week also. Investors hope the government and RBI are committed toward curbing volatility in the forex market,” said Srinivasa Raghavan, treasurer at Dhanlaxmi Bank.
“The meeting was mainly to seek ideas and suggestions on what can be done about capital inflows. It was a very good and positive meeting,” Chanda Kochhar, MD and CEO, ICICI Bank, said.Bad blood between promoters, investors: are the bad days back?