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PM Modi meets Arun Jaitley ahead of key economy review tomorrow
The economic review meeting on Saturday, which is seen to have lifted investor sentiment at the stock exchange.
Prime Minister Narendra Modi met finance minister Arun Jaitley and top officials ahead on Friday evening ahead of a key meeting this weekend to review the state of the economy.
The crucial review meeting on Saturday comes against the backdrop of a weakening rupee, high oil prices and a widening current account deficit.
The expectation that PM Mod’s review would discuss possible fiscal and monetary steps that could be taken has lifted investor sentiment at the stock market over the last two days. The National Stock Exchange had closed 1.28 per cent higher on Friday but over the week, the index had weaken 0.64 per cent.
The weaker rupee and rising fuel costs are politically-sensitive issues in the run up to general elections next year and had united opposition parties to join a Bharat bandh first called by the Congress this week. The opposition has blamed PM Modi for the rough patch, with the Congress alleging that the government had only focussed on the top 15-20 industrialists and not common people and farmers.
Petrol and diesel prices peaked yet again on Friday after petrol went up by 28 paise a litre and diesel by 22 paise.
The rupee has depreciated more than 12% so far this year on a widening current account deficit (CAD) and higher oil prices.
Subhash Garg, the economic affairs secretary, tweeted earlier this week that there was no fundamental rationale for the rupee to depreciate to the low levels of the previous session and reflected the overreaction of market operators.
“Government and RBI will do everything to ensure that rupee does not slide to unreasonable levels,” he said on Wednesday.
