The PHD Chamber of Commerce and Industry on Tuesday urged the RBI to intervene more actively in the forex market for arresting the appreciating tendency of rupee.

"Reserve Bank of India should intervene more actively in the foreign exchange market for limiting further appreciation of the rupee," PHDCCI said in a statement in New Delhi.

This intervention is essential due to lower appreciation of currencies in competing economies and fixed exchange rate of the Chinese currency, it added.

The chamber body favoured some tightening of controls on short term capital inflow.

PHDCCI has found that the interest rates in India are at least 3-5 per cent higher in real terms than the prevailing rates in the US and other advanced countries, it said.

Foreign investors, not only NRIs but also FIIs and hedge funds are now taking full advantage of this differential and pouring money into India, it said, adding that all these have caused pressure on the rupee.

"This calls for reduction in the rates of interest to a level which suits market conditions," PHDCCI said.

Offering an alternative, the chamber body suggested that a portion of foreign exchange reserves could be set aside for export promotion and for prepaying costly debts.

"The government must promote exports aggressively and use the India Brand Equity Fund to create the India brand to boost export growth," it said.