Mar 1, 2008

Economy News 1st March 2008

***Rupee closes tad against dollar

***Chidambaram hopeful of 9 p.c. growth

 

Rupee closes tad against dollar

Mumbai: The rupee was flat against the dollar on Feb 27 as oil companies bought dollars and also because the stock market was negative. Due to overnight weakness in the dollar, the rupee opened higher by five paise at 39.74/75, against the earlier close of 39.79. During the day, the rupee touched a high of 39.72, but dollar-buying pushed it lower to close at 39.78. In forwards, the six-month premia closed at 0.25 per cent (0.2 per cent) and the 12-month closed at 0.5 (0.48 per cent). According to a forex dealer with a public sector bank, the budget is likely to be a populist one and is not likely to have any negative impact. The FII inflows would resume after March 15. The rupee is unlikely to depreciate below 40.25.

 

Chidambaram hopeful of 9 p.c. growth

New Delhi: With the country's economic fundamentals strong and investment climate full of optimism, Finance Minister P. Chidambaram on Thursday exuded confidence on achieving an average GDP growth of nine per cent during the Eleventh Plan period (2007-08 to 2011-12) while reining in inflation alongside.

As for the outlook for 2008-09, Mr. Chidambaram said: "Optimism, but with caution, is the watchword" while commenting on the policy prescriptions of the Economic Survey 2007-08 which projected a lower GDP growth of 8.7 per cent for the current fiscal and, in that light, viewed sustenance of a high growth as a daunting task.

Speaking to newspersons immediately after tabling the Survey in Parliament, Mr. Chidambaram pointed out that the country was required to respond to the evolving global economic situation so as to ensure that its growth was not affected and this, he said, could be achieved by capitalising on the opportunity arising from the "favourable" conditions.

"I am optimistic about growth and containment of inflation in the coming year [2008-09]," he said, while noting that his priority was to provide a conducive investment climate and manage the macro economy to facilitate non-inflationary growth.

Reading out from a prepared statement which was later released to the press, Mr. Chidambaram said: "Keeping inflation under control in an uncertain global environment will be one of the major challenges in 2008-09." He noted that the current slowdown and possible recession in the global economy posed risks to growth.

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