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September 14, 2018 11:38 PM | Business

Finance ministry says centre to look at measures on capital accounts to control current account deficit

The union finance ministry on Friday said government will look at measures on capital accounts to control current account deficit (CAD) to stem a sharp fall in the rupee.

The capital account comprises foreign investments, overseas borrowings and NRI deposits.

In an exclusive interview to CNBC-TV18, SC Garg, union economic affairs secretary, said government has identified items where exports can be promoted and restrict non-essential imports.

Garg said external accounts was the focus of today's meeting chaired by Prime Minister Narendra Modi to review the state of the economy.

No domestic policy measures related to oil was discussed in today's meeting, Garg added.

Talking on US sanctions, Garg said issues over Iran was discussed and the government is exploring various options to deal with sanctions on Iran.

Garg said government's five decisions to contain current account deficit will have a meaningful impact and these steps will have a $8-10 billion effect on the economy.

Earlier, the government decided to relax norms for raising overseas borrowing and impose restrictions on the non-essential imports as part of efforts to check rising CAD amid falling rupee.

These decisions were taken at a meeting chaired by Prime Minister Narendra Modi to review the state of the economy.

Modi was briefed by Reserve Bank of India (RBI) Governor Urjit Patel and officials of the finance ministry, finance Minister Arun Jaitley told reporters in New Delhi after the meeting.

The decisions are aimed at checking the CAD and increase foreign exchange inflows, Jaitley said.

The government would also take steps to promote exporters and restrict non-essential imports, he added.

(With inputs from PTI)
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