MUMBAI, Sept 20 Reserve Bank of India Governor
Raghuram Rajan said on Friday that he was confident that the
current account deficit could be financed this year without
suffering a substantial drawdown in foreign exchange reserves.
India needs to withdraw liquidity measures, introduced in
July to stabilise the rupee, as soon as market conditions allow,
Rajan told a press conference after conducting his first policy
review since becoming governor.
Rajan surprised markets by raising interest rates to ward
off rising inflation while scaling back some emergency measures
put in place to support the ailing rupee.
India's foreign exchange reserves fell to
$274.806 billion as of Sept. 6, compared with $275.49 billion in
the earlier week. [ID: nI8N0FW01Z]
The country's record-high current account deficit has made
it especially vulnerable to the flight of funds.
For more on the central bank decision, see
(Reporting by Archana Narayanan; Editing by Simon