Prime Minister Wants Measures to Avoid Rupee Volatility: Chidambaram

New Delhi – Prime Minister Manmohan Singh wants measures to avoid volatility in the rupee, the finance minister said on Thursday, underlining government concern about one of Asia’s worst performing currencies this year.

A combination of contentious proposals to tax overseas investors, a policy logjam and global risk aversion hammered the rupee earlier this year.

“The prime minister underlined the need for a number of measures that will ensure that there is no volatility in the rupee,” Finance Minister P Chidambaram told reporters after a meeting of the ruling alliance’s partners.

Prime Minister wants measures to avoid rupee volatility: Chidambaram did not specify what the measures might be.

The partially convertible rupee dropped more than 15 per cent from its 2012 high in early February to a life low of 57.32 per dollar on June 22.

It has since recovered about 7 per cent to trade around 53.3, helped in part by a slew of government reforms to repair the country’s finances and attract foreign investment.

Singh has also vowed to remove investment bottlenecks and clarify tax rules.

But his decision to increase the price of heavily subsidised diesel sharply and to throw open the retail sector to foreign investment has cost him the support of his biggest ally in the ruling coalition, the Trinamool Congress, reducing his government to a parliamentary minority.

Chidambaram said the government will continue to take measures to boost investments in the economy.

“Investment is the key and that was underlined today,” he said.

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