Kolkata, May 14 (Inditop.com) Chief economic advisor Kaushik Basu Friday said the Reserve Bank of India (RBI) should take some open market actions to tame the rupee from appreciating further.
“I am not in favour of increasing capital control but there is reason. It is time to think about some kind of open market actions by the RBI,” Basu said addressing a conference.
Basu said hot money inflows from foreign institutional investors have resulted in two worries – appreciation of rupee and threat of outflow at a later stage when the hot money is withdrawn.
“It is not to try to buck the trend if it is a permanent change taking place but what we are seeing is a fluctuation and some action is needed,” he said.
He described the global situation as uncertain and said it was difficult to predict global recovery.
“The truth is that we don’t know how the recovery will take place,” Basu added.
