Foreign capital flows into India and the appreciating rupee were not causing any concern currently for policy makers, the finance secretary said on Tuesday. The rupee has risen a little over 2 percent to date since January this year on the back of overseas fund flows and expectations of rate hikes. The partially convertible rupee closed at 45.60/61 per dollar on Tuesday, from Monday's close of 45.59/60.
"They (inflows) are not to the extent and of the variety which are causing any stress or going beyond the realistic limit, which the current account deficit permits," Ashok Chawla told reporters. "The (rupee's) appreciation has not been of any great magnitude that will cause stress," Chawla said.
The Indian central bank had on Friday raised its key lending and borrowing rates by 25 basis points each. Analysts expect a further hike of 25 basis points in April. Foreign institutional investors have invested $3.4 billion in equities so far in the current fiscal ending March and put in another $3.8 billion in debt.