MUMBAI, Dec 23 (Reuters) - Capital outflows from India seem to have stabilised, the current account deficit is still within limits and pressure on the rupee has abated, a top economic adviser to the prime minister said on Tuesday.
'Even after the depletion because of FII (foreign institutional investor) outflows, the foreign exchange reserve position is comfortable,' Suresh Tendulkar, chairman of the prime minister's Economic Advisory Council, said in a speech at a business conference.
India's foreign exchange reserves have fallen to around $250 billion in mid-December, from a record $316.2 billion in May as foreign investors dumped stocks and exports slowed.
Tendulkar said India's economic fundamentals were robust but added economic growth may slow by a couple of percentage points from last fiscal year's rate of above 9 percent.
'I am not denying for a moment that the times are harder than you have experienced in the last five years,' he said.
The central bank expects growth between 7.5-8.0 percent with a downward bias for the current year that ends in March, and its chief said earlier this month it would have to revise down its growth forecast for the 2008/09 year at a review in January.
To prop up flagging growth and encourage banks to lend more, the central bank has slashed its key short-term lending rate by 250 basis points and eased banks' cash reserve requirements.
(Reporting by Saikat Chatterjee, Editing by Mark Williams) Keywords: INDIA ECONOMY/ADVISER (anurag.joshi@thomsonreuters.com; +91-22-6636-9035; Reuters Messaging: anurag.joshi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'Even after the depletion because of FII (foreign institutional investor) outflows, the foreign exchange reserve position is comfortable,' Suresh Tendulkar, chairman of the prime minister's Economic Advisory Council, said in a speech at a business conference.
India's foreign exchange reserves have fallen to around $250 billion in mid-December, from a record $316.2 billion in May as foreign investors dumped stocks and exports slowed.
Tendulkar said India's economic fundamentals were robust but added economic growth may slow by a couple of percentage points from last fiscal year's rate of above 9 percent.
'I am not denying for a moment that the times are harder than you have experienced in the last five years,' he said.
The central bank expects growth between 7.5-8.0 percent with a downward bias for the current year that ends in March, and its chief said earlier this month it would have to revise down its growth forecast for the 2008/09 year at a review in January.
To prop up flagging growth and encourage banks to lend more, the central bank has slashed its key short-term lending rate by 250 basis points and eased banks' cash reserve requirements.
(Reporting by Saikat Chatterjee, Editing by Mark Williams) Keywords: INDIA ECONOMY/ADVISER (anurag.joshi@thomsonreuters.com; +91-22-6636-9035; Reuters Messaging: anurag.joshi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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