Mumbai - Indian Prime Minister Manmohan Singh said the government’s push to bolster growth will support the rupee, seeking to ease concern that the currency’s depreciation risks destabilising the economy.
“The macro-stabilisation process which should support the value of the rupee is under way,” Singh said in parliament in New Delhi today. “As the fruits of our efforts materialise, currency markets will recover.”
Foreign investors have pulled money out of Indian stocks and bonds in recent weeks on risks including a record current-account deficit and the prospect of cooling US monetary stimulus. Economic growth probably held below 5 percent last quarter, according to the median estimate in a Bloomberg News survey ahead of a report later on Friday. A cash squeeze by the central bank to support the rupee threatens to weigh on investment.
Singh said the government is tackling the budget and current-account shortfalls, clearing stalled projects, wooing overseas investors and curbing fuel subsidies. The central bank will focus on bringing down inflation, he said.
The rupee fell 0.1 percent to 66.64 per dollar as of 1.17pm in Mumbai. The currency’s drop of about 18 percent this year is the steepest in a basket of 11 Asian currencies tracked by Bloomberg.
The report on economic growth is due at 5.30pm in New Delhi on Friday. - Bloomberg