Rupee won’t appreciate, Montek assures exporters

Seeking to soothe the fears of exporters, Planning Commission deputy chairman Montek Singh Ahluwalia, who is spearheading the G20 negotiations for India, said in Seoul on Wednesday that India can handle capital inflows of even up to $55-75 billion this year without having to let the rupee appreciate.

''Capital inflows need not lead to appreciation necessarily,'' he said, and explained that since India was looking to finance a current account deficit of 3 per cent, he was personally quite happy to let the exchange rate be.

''It would be a different matter if the surge was $100 billion,'' he added. He also said that if ''capital flows are excessive, we should learn to handle them.'' But he nevertheless ruled out further appreciation.

China has announced that it will consider capital controls in view of the latest US fiscal stimulus of $600 billion to avoid destabilising capital inflows. India was in no hurry to do the same, Ahluwalia indicated.

Asked what India has gained from the G20, he said that one of the biggest benefits was that in the IMF pecking order, India had moved up from the 22nd rank to the eighth rank. This indicated improved clout.

According to Ahluwalia, officials are working to bridge differences ahead of the meetings of the global leaders. ''All critical issues are (still) left in square brackets; not sure how it will shape up,'' he said. ''Some of these final decisions will be made when the heads of governments speak. Otherwise, the G-20 is continuing the agenda that it has started.