PM with C Rangarajan, D Subbarao & Montek Singh reviews decline in rupee and its impact
Prime Minister Manmohan Singh reviewed the plummeting trend of rupee value and its impact on the economy with: D Subbarao , RBI Governor; Montek Singh Ahluwalia, Planning Commission Deputy Chairman and C Rangarajan, Chairman of Prime Minister’s Economic Advisory Council (PMEAC).
They attributed rupee depreciation to mismatch b/w the Current Account Deficit (CAD) and capital flows in India. They agreed upon:
- The need of further RBI intervention, in short term, to tackle market rumours
- Bringing down the CAD and increasing the capital flows in the medium-term
- Direct sale of dollars to oil marketing companies (OMCs) to ease pressure on the rupee
The oil firms buy dollars in large quantities to import crude from the international market. India’s crude oil import bill was 155.6 billion US dollar in 2011-12