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Government committed to restore growth momentum, stabilise rupee: PM

June 24, 2012 - Onboard Special Aircraft

Prime Minister Manmohan Singh has said his government is committed to restore the country's growth momentum in the backdrop of rising economic slowdown.

He said this while briefing mediapersons onboard an Air India flight enroute New Delhi from Rio de Janeiro in Brazil late on Saturday night.

"You have my assurance that I recognise that we have to work our way to restore the momentum of growth which India needs and which the people of India want the government of India to work for," said Singh.

Commenting on the figures that depict the country's economy on a discouraging note of a developing nation, he expressed hopes to improve the current nine-year-low growth rate of 5.3 percent in the last quarter.

"There is no stagflation. There is a slowing down, I am still confident that we can ensure that the growth rate of the economy in the rest of the year improves to about seven percent per annum," said Singh.

He also highlighted that his government would deal with any hurdles blocking the path of investments into the country.

"We need foreign investment, portfolio investment and direct investment, if there are any obstacles which come in the way, if there are any policy impediments, we will address those problems, effectively and credibly," said Manmohan Singh while responding to a poser on recent ratings downgrade of India.

Just a day after the rupee hit a new record low against the dollar, the economist Prime Minister added to say on a confident note that the currency would soon be stabilised.

"As far as the rupee is concerned, well, we are operating a system which is market based exchange rate. We intervene only to curb violent fluctuations. I am confident that measures that I have outlined will return rupee also to a more stable path," said Singh.

The partially convertible Indian currency on Friday hit a record low of 57.32 against the dollar, before the country's central bank, the Reserve Bank of India (RBI) suspected intervention propped it up.

The rupee had hit its last record low at 56.55 on Thursday.

Traders said the central bank probably sold 250-300 million dollars on Friday to rescue the Indian currency.

The rupee dropped a little over 3 percent against the dollar this week, its worst weekly decline in nine months, weighed down by mounting concerns over the global as well as India's economy.

Analysts say the rupee could continue to fall further in the near-term, dragged down by the momentum from the worsening global risk environment.


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