The rupee gained after recovering from a near-record low hit earlier in session, as policy makers pledged renewed efforts to defend the currency.
MUMBAI/NEW DELHI: Government stepped up its defence of the ailing rupee on Wednesday, proposing to relax overseas borrowing rules and curb some imports in order to ease a huge current account gap, while the RBI re-emphasized its commitment to stabilizing the currency as it neared a record low.
The tag-team approach, including RBI interventions in the foreign exchange market, helped the rupee rally, a day after losing 1.8 percent as remarks by Reserve Bank of India governor Duvvuri Subbarao led traders to question its ardour to defend the currency.
The RBI has implemented a series of steps to tighten market liquidity and raise short-term interest rates in order to shore up the rupee. On Tuesday, traders were rattled after Subbarao said the central bank would return to a pro-growth monetary stance only once the currency stabilized.
The tag-team approach, including RBI interventions in the foreign exchange market, helped the rupee rally, a day after losing 1.8 percent as remarks by Reserve Bank of India governor Duvvuri Subbarao led traders to question its ardour to defend the currency.
The RBI has implemented a series of steps to tighten market liquidity and raise short-term interest rates in order to shore up the rupee. On Tuesday, traders were rattled after Subbarao said the central bank would return to a pro-growth monetary stance only once the currency stabilized.
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