New Delhi: The Finance Ministry on Tuesday said it will take steps to increase foreign investment flows into the country to strengthen rupee and the regulators will act at appropriate time to contain the fall in domestic currency that touched a record low of 58.96 to a dollar.
    
"We will continue to implement measures to ensure that portfolio investor inflows are enabled and encouraged and some of these measures will be announced very shortly.
     
"In the coming weeks, we will recommend to the Cabinet policies to enhance FDI limits on number of areas all this will help not just in short-term objective of financing the CAD safely but also in the longer term objective of ensuring sustainable growth," Chief Economic Advisor Raghuram Rajan told reporters.
    
The exchange rate has depreciated by 5.5 percent since January 1 and over 2.5 percent in last two trading session. The rupee on Tuesday touched intra-day record low of 58.96 against the dollar.
     
"There has been some volatility in the financial markets in the last few days. The government, the RBI and the Sebi are watching the market development and each one will take action as warranted," Rajan said.
     
He said depreciation in rupee is mainly on account of outflow of FII funds from debt instruments and high trade deficit. Since May 1, outflows from debt instruments stood at USD 486 million. At the same time, equity inflows stood at USD 4.16 billion. So, since May 1, the portfolio inflows into India have been USD 3.7 billion.
    
"Despite these reasons debt outflow and larger trade deficit in May -- things are turning around," he said.

(Agencies)

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