Finance minister P Chidambaram is likely to unveil steps on Thursday to help the domestic currency stabilise against the US dollar even as the industry and foreign investors struggle with high imported raw material costs and reduced returns with the rupee at a sub-57 level.

The rupee appreciated from record lows of R58.98 per dollar, which it hit on Tuesday and ended stronger at R57.80 on Wednesday. However, there are still concerns as it is well off what analysts call a ‘comfort level’ of around R54 to R55 to the dollar. The US currency also continued gaining, leading to another day of massive sell-offs in emerging markets’ currencies.

The finance minister met senior finance ministry officials, including chief economic advisor Raghuram Rajan and additional secretary Shaktikanta Das, along with the joint secretaries of capital markets and infrastructure. Economic affairs secretary, Arvind Mayaram, who was in Mumbai at the time of the meeting, is said to have attended via teleconference.

In the meeting, the officials discussed likely measures to prop up the weak rupee. When asked if the government will announce some steps, Chidambaram told reporters, ?I will talk to you on Thursday.?

The government is considering steps to increase portfolio and Foreign Direct Investment (FDI) in sectors like insurance, pension and defence, among others to attract overseas funds into the country. Besides, the finance ministry is also working on measures to attract FII money into government debt. Rajan and Mayaram said the government is looking at a number of instruments, including issuing NRI bonds. Rajan said on Tuesday it could help in raising the badly needed foreign exchange.

According to Mayaram, the instrument would be used only for raising capital for infrastructure projects. ?There are a number of things the government can do. The RBI can stop people from shorting the rupee, the ministry can increase FII limits for government debt and relax the ECB norms, besides issuing NRI bonds,? Sujan Hajra, chief economist at Anand Rathi Securities told FE.

The government had raised billions of dollars through similar offerings like the India Resurgent Bonds and India Millennium Deposits in 1998 and 2000, respectively.

Hajra also said further steps can be imposed to curb gold imports. It, however, is an action which is not being considered for now, Rajan said on Tuesday

Some experts did not see much legroom for the government to take policy steps towards strengthening the domestic currency, particularly in the wake of the increase in import duty on gold announced last week.

“One option before the government could be to encourage FDI into infrastructure projects. The slight appreciation in rupee that we saw on Wednesday may remain short term, while in the long term, the domestic currency is likely to maintain a bias towards depreciation against the US dollar,” said Reena Rohit, chief manager, non-agri commodities and currencies, Angel Broking.

?Even if the currency goes to 60 versus a dollar, it will be a temporary thing. Over the longer term, we are not concerned that much. Ultimately any step we take will have to be longer term. While short-term measures have their uses, over a longer period of time, the current account deficit has to be bought down,? a senior finance ministry official told FE.

The Planning Commission deputy chairman Montek Singh Ahluwalia said the government was not targeting any particular level of rupee and that continuous steps were being taken to improve domestic investment confidence. ?Currencies move up and down and I think the market knows how to deal with that,” Ahluwalia said.