INSUBCONTINENT EXCLUSIVE:
New Delhi: The country needs to be extremely vigilant to check weakness in the rupee, and the task was to minimise volatility and avoid
contagion to other macro policies, a member of the prime minister's economic advisory panel said on Friday.Prime Minister Narendra Modi is
set to meet officials on Saturday to decide ways to address the currency's weakness and rising fuel prices, though it was unclear whether
the panel or any of its members would attend.Support measures for the rupee were likely to be announced after the meeting, officials said
earlier this week.Despite strong economic growth, the rupee has weakened more than 11 per cent to become Asia's worst performing currency
this year, as the country's current account deficit widened, and balance of payments moved into the red as a consequence of higher oil
global prices and an emerging markets sell-off that has seen portfolio inflows dwindle."Extreme vigilance continues to be required," panel
member Rathin Roy said in a blog.Mr Roy said "the present challenge can be effectively dealt with" if vigilance is exerted, officials
communicate effectively, the government maintains its policy stance, and doesn't put other macroeconomic goals at risks through actions like
widening the fiscal deficit by lowering taxes, or using interest rates to manage the exchange rate.Mr Roy, who heads National Institute of
Public Finance and Policy, a think tank partly funded by the finance ministry, said weak rupee was unlikely to lead to fall in imports due
to strong demand, notably for crude oil and electronic items.He also cautioned that any cut in tax rates on petroleum products could widen
He said the government should rather focus on minimising the rupee volatility and take structural reforms to boost exports.The prospect of
support measures being announced after Saturday's meeting helped the rupee recover to 71.65 per dollar, its strongest since September 7
The rupee had closed at 72.1950 on Wednesday, and Thursday was a holiday.Finance ministry officials said reducing the fiscal deficit may be
difficult as India heads into election year, but the government could consider raising import duties on some electronic items and ease rules
for foreign investors.Delhi is also open to issuing Non-Resident India (NRI) bonds or opening a forex swap window for oil marketing
companies, to stem rupee's fall if it became unreasonable.Economic affairs secretary Subhash Chandra Garg said on Wednesday the government
