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Manmohan says there will be no capital control to anchor rupee.

NEW DELHI:

India has assured foreign investors it is not contemplating capital controls as a step to stabilize the falling Indian rupee.

Prime Minister Manmohan Singh says the rupee’s sudden decline is a shock, but his government will not address by it imposing capital controls or by reversing reforms.

India’s stock market has dropped more than 10 percent in the past three months and the rupee has lost a sixth of its value against the dollar this year. Much of that fall has been in the past month.

Singh said the rupee’s weakness largely stems from India’s large current account deficit, caused by huge imports of gold and higher costs of crude oil and coal imports.

The government has raised gold taxes and hiked deposit rates to combat the outflow of money.

source:http://www.firstpost.com

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