In a bid to contain the free fall of rupee, the Finance Ministry said it will take steps to boost foreign investment flows into the country.
“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,” Chief Economic Advisor to the Finance Minister Raghuram Rajan told reporters on Tuesday.
Rupee depreciation is mainly on account of outflow of FII funds from debt instruments and high trade deficit, he said.
“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 CAD safely but also in the longer term objective of ensuring sustainable growth,” Rajan said.
Rajan said, “There has been some volatility in the financial markets in the last few days. The government, RBI and SEBI are watching the market development and each one will take action as warranted.”
Since May 1, outflows from debt instruments stood at $486 million and equity inflows stood at $4.16 billion.