There seems to be no end to the rupee’s woes.
With the Indian currency crossing 62 against the dollar, Finance Minister P Chidambaram got busy chalking out steps that could prevent the currency’s further fall.
However, the question is: will the government succeed to counter the crisis that rupee is facing at the moment?
Hope seems to fade with each passing day.
Rupee, as it appears, is on a free fall and is setting new record every other day.
However, assurances keep pouring in from the Centre.
On Monday, three hour-long meeting headed by Chidambaram was attended by Secretaries of departments of Revenue, Expenditure, Financial services and Disinvestment.
Sources said the Finance Minister took stock of the functioning of various department and sought suggestions from officials for improving the economic situation.
The agenda for next three months was discussed, another source said.
The meeting comes in the backdrop of rupee touching an all time low of 62.82 to a dollar and the stock markets too witnessing a decline.
"It was a performance assessment and way forward," a source said.
The Minister would be meeting the Department of Economic Affairs on Tuesday.
To restrict the outflow of foreign currency, the Reserve Bank of India on August 14 announced stern measures, including curbs on Indian firms investing abroad and on outward remittances by resident Indians.
The central bank reduced the limit for overseas direct investment by domestic companies, other than oil PSUs, under the automatic route from 400 per cent of net worth to 100 per cent.
Higher levels of ODI would now need prior approval from RBI.
Last week, Finance Minister P Chidambaram had reiterated that the current account deficit would be brought down to $70 billion this fiscal from $88.2 billion in the previous year and steps would be taken to increase foreign fund inflows.
High gold imports pushed CAD to a record high of 4.8 per cent of gross domestic product in 2012-13 when India imported 845 tonnes of yellow metal. Import of gold in April-July 2013-14 rose 87 per cent to 383 tonnes as compared to the same period of last fiscal.
In order to curb import of gold and contain CAD, the government raised customs duty on precious metals like gold, silver and platinum to 10 per cent.
RBI also imposed restrictions on import of gold coins, medallions and dorebars and said importers would require licence for the purpose from Directorate General of Foreign Trade.
Referring to the rupee, he had said: "Given our fiscal deficit, given our CAD, there will be some pressure on rupee and rupee will indeed depreciate.
“All that we are saying is that we cannot allow the rupee to go into a free fall. We are arguing for a stable rupee."
