Declining currency: Indian government takes drastic economic measures
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*NEW DELHI - India’s government is planning to take drastic measures in order to stop the decline in the currency which has been termed as worst performing currency of the Asia.*
*Government to ask state oil firms to lock in their crude futures purchase prices, a government source said on Thursday, anticipating a spike when US sanctions on Iran snap back again in November.*
The move would be another step to tackle a slide in the rupee, as oil prices are putting pressure on India, which imports some 80 percent of its crude demand. Its currency has fallen sharply this year against the U.S. dollar, amid a wider sell-off in emerging markets.
“The futures should be locked in when crude price is down,” said the source, who is familiar with deliberations on the matter, adding the step should have been taken earlier.
The rupee, Asia’s worst performing currency this year, has depreciated about 12 percent year-to-date against the U.S. dollar, closing at 72.39 on Wednesday, after a record low of 72.99 on Tuesday. Markets were closed on Thursday.
The government is expected to announce a set of measures to discourage non-essential imports to stem the slump in the currency.