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Analysts worry that without more fundamental reforms, India will struggle to contain its record high current account deficit and hence support the rupee.
Chidambaram on Monday sought to soothe nerves about its external finances by promising to contain the current account deficit at 3.8 percent of gross domestic product this fiscal year with a slew of measures including easing rules for raising loans abroad.
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The worst performing Asian currency of the year so far hit a new life low of 61.80 rupees per dollar on Tuesday, breezing past a previous low of 61.21 hit on July 8. Central bank intervention helped the rupee recover, but by Wednesday it was sliding once again, to stand around 61.41 by 1.30 p.m.
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The rupee resumed lower at 61.15 per dollar as against the last closing level of 60.77 per dollar yesterday at the Interbank Foreign Exchange (Forex) Market and dropped further to 61.44 per dollar before quoting at 61.40 per dollar at 1045 hours.
The rupee had dipped by a massive 67 paise to an all-time closing low of 61.10 against the dollar on Friday.
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Subbarao also said credible fiscal consolidation is a pre-condition for stabilising inflation and in securing non-inflationary growth.
Absolutely for customer investing over Rs 50,000 in any financial products.
The rupee fell on Monday on fears of foreign outflows after stronger-than-expected US jobs growth data cemented expectations of an early end to US stimulus measures.
The intervention was spotted when the rupee hit 59.90 to the dollar or below
Heightened volatility makes the debt rollovers difficult.
Traders said the rupee was also supported by speculation that May wholesale inflation due this week may show continued easing.
The RBI said it had not found initial evidence of money laundering against the three banks.
The majority view remains for the central bank to leave the cash reserve ratio unchanged at 4 per cent.
Shares were also buoyed by positive global sentiment on hopes major central banks will ease monetary policy further or continue to keep it loose for long.
It doesn't point out weakness that is being reported.
India taxes these investors higher and is excessively cautious towards derivatives.
India will soon allow corporate houses to open banks despite misgivings within the RBI.
CEO Rana Kapoor said no such discussion or proposition has ever transpired.
An estimated 177 million Muslims in India, the largest Muslim minority population in the world, are unable to use Islamic banks because laws covering the sector require banking to be based on interest, which is forbidden in Islam.
India's sovereign rating could be cut if the government loosens fiscal policy in the run-up to elections, says Fitch.
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