The Finance Ministry may announce new measures to arrest the fall in rupee and check the current account deficit as early as Saturday.
Finance Minister P. Chidambaram held a series of meetings on Friday with his officials besides Commerce Secretary S.R. Rao. The Minister already gave a brief of the measures when he addressed the media on July 31. The measures are likely to include liberalisation of external commercial borrowing norms, norms for public sector enterprises to raise funds abroad, curbs on import of non-essential goods and a booster dose for exports.
Chidambaram had earlier said that the Government would be looking at “some compression in non-oil and non-gold imports, especially of non-essential goods.”
He had cited the examples of coal and electronic hardware, adding that the officials would be working out a list of imported items that could be reduced.
The High Level Committee on External Commercial Borrowings also held a meeting this week in Mumbai. The officials are tight-lipped about the outcome of the meeting. However, Economic Affairs Secretary Arvind Mayaram did say, “I think you should wait till the end of the week. The Finance Minister will be talking about this later.”
The Reserve Bank of India has already taken a number of measures to contain the fall in rupee. Just on Thursday, the central bank announced that it would auction Rs 22,000 crore of bonds every Monday to suck out liquidity and check speculation in the foreign exchange market.
Earlier, it had raised the Marginal Standing Facility rate to make borrowings from RBI expensive for banks. The RBI and the Government have also taken steps to curtail imports of gold.
The current account deficit, which occurs when total imports of goods, services and transfers exceed exports, had hit a record high of 4.8 per cent of GDP in fiscal 2012-13, as rising purchases of oil and gold from overseas widened the trade gap.
A widening CAD also weighs heavily on the local currency, which touched a life-time intra-day low of 61.80 to the dollar on August 6.
The rupee has depreciated over 13 per cent in the past three months.