C Rangarajan shocks, says 'adjustment' in Indian rupee called for

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The partially convertible rupee dropped as much as 3.1 percent to 68.12 per dollar. The partially convertible rupee dropped as much as 3.1 percent to 68.12 per dollar.
SummaryManmohan Singh's top adviser surprises by indicating the crash in rupee's value was needed.

in the different spheres of economy.

"We need to bring about price stability, stability in foreign exchange market and stability in fiscal system. We have deviated from it in the last few years," he said.

Reposing faith in the government's resolve to contain CAD at USD 70 billion in current fiscal, Rangarajan said it was possible to achieve the target with some adjustment in gold, oil and coal imports.

CAD, which reflects the difference between outflow and inflow of foreign exchange, touched a record high of USD 88.2 billion in last fiscal.

"In short term we have to ensure capital flows are adequate (to finance CAD) and in medium term we need to bring down the CAD," the PMEAC chief said.

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