Select Import Curbs Fail to Contain Indian Rupee's Fall

16:15 GMT, 17 September 2018

The rupee weakened one percent to INR 72.6 per dollar in Asian trading Monday morning. India’s foreign currency reserve has fallen below $400 billion, as the Reserve Bank of India is using its dollar reserve to halt the currency’s fall.

Sputnik

New Delhi (Sputnik): Despite the Indian government pulling the brakes on the import of "non-essential items" in a bid to reduce India's current account deficit, the rupee was not able to hold the gain it had struck last weekend when the markets reopened Monday morning.

"Dollar outflows, trade wars, and high global crude oil prices have hit India despite strong fundamentals," Arun Jaitley, India's minister of finance said on Friday night after Prime Minister Narendra Modi took stock of the economic review. Jaitley added that a falling rupee had hurt the current account deficit and that it needed to be dealt with "immediately."

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The Indian government will identify the product upon which it intends to impose import restriction in the next few days. "We will also keep in mind that the decisions are WTO-compliant," Jaitley said.

Meanwhile, most of the brokerage houses seemed unimpressed with the government's measures. According to media reports, international brokerage house Citi said that it will not be surprised if USD/INR tries to test the earlier high as a knee-jerk reaction.