×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

No controls on FII inflows; RBI may check rupee appreciation: Pranab

No controls on FII inflows; RBI may check rupee appreciation: Pranab
PTI
Comment E-mail Print Share
First Published: Tue, Oct 26 2010. 01 32 PM IST
Updated: Tue, Oct 26 2010. 01 32 PM IST
New Delhi: The government Tuesday ruled out putting controls on FII inflows into the equity market as of now, but said that RBI may intervene to check the rupee appreciation if needed.
“At this time, I am not thinking of putting cap on FIIs (inflows in equity market),” finance minister Pranab Mukherjee told reporters at the annual Economic Editors Conference in Delhi.
This year, the FII inflows have already reached $24.48 billion. Of this, FIIs pumped in $6.11 billion, about 25% of the total inflow so far, in the month of October alone.
The current levels of capital inflows, which exceed financing requirements of the current account deficit, have put pressure on the rupee, resulting in its appreciation over the last few months.
Pranab said the rising rupee has implications for exports.
RBI is keeping an eye on it and will take action if needed, he added.
“We have faced similar situation in the past and have overcome it without taking recourse to some of the more stringent policy measures that are by now well known to discerning analysts,” Pranab said.
The upward movement of the rupee against the US dollar was sharp in recent weeks as the Indian currency has climbed about 5.6% since the beginning of September due to sustained capital inflows.
Pranab said high FII inflows help to finance current account deficit.
“I am confident that with FII inflows and forex reserves, we will be able to contain current account deficit at around 3% of GDP (this fiscal),” he said.
Current account deficit is the gap between the amount the country pays to external world against what it receives from abroad, barring capital movement. It was around 3.6% of GDP in the first quarter of 2010-11.
Pranab attributed this to higher non-petroleum imports which reflected in robust customs duty collection.
In first six months of this fiscal, revenue collections from customs jumped 66.8% to Rs63,229 crore as against the year-ago period.
Comment E-mail Print Share
First Published: Tue, Oct 26 2010. 01 32 PM IST
More Topics: Pranab Mukherjee | FII | Rupees | RBI | Dollar |