(Recasts with rupee outlook, adds finmin quotes)
By Anurag Joshi
MUMBAI, Nov 5 (Reuters) - The Indian rupee could appreciate
more because of strong economic growth and exporters need to
become more competitive in the global market, the finance
minister said on Monday.
The comment pushed the rupee <INR=IN> towards its strongest
level in nearly a decade, but the rise was halted by suspected
central bank intervention, dealers said.
"With the economy growing at an average rate of 8.6 percent,
the rupee is bound to strengthen," Finance Minister Palaniappan
Chidambaram told a gathering of members of the ruling Congress
Party.
"One must learn to become competitive, learn to cut costs
and learn to innovate," he added.
The rupee, which has risen about 12.6 percent this year on
robust capital inflows, ended steady at 39.31/32 per dollar with
the central bank actively buying dollars after it rose to 39.22
immediately after Chidambaram's comments, dealers said.
"One must learn to trade in the environment, where the rupee
will strengthen. What is causing concern is the rapid
appreciation of the rupee," Chidambaram said.
Exports were still growing 18 percent, which was no mean
achievement, he said.
"Merely because the profits are down does not mean we should
present an alarmist picture," he said. "We have given support
and it will be completely wrong for exporters to boost
bottomlines by retrenching jobs."
Chidambaram said India's income per person was expected to
rise to $1,000 at current exchange rates by the end of the
fiscal year in March 2008 on the back of 9 percent economic
growth.
Per capita income stood at $797 in 2006/07, data from the
central bank's Web site: www.rbi.org.in showed, nearly double
from $460 in 2000/01.
In 2006/07, India's economy expanded 9.4 percent -- one of
the fastest growth rates in the world. The growth has averaged
8.6 percent in the past four years.
"Per capital will double every nine years. By 2016/17, per
capita will be $2,000 if we grow at 9 percent and in another
nine years, by 2025, per capita would be $4,000 and that will
make us a middle-income country," Chidambaram said.
He said the government would devise ways to utilise its
rising foreign exchange reserves to improve infrastructure.
India estimates it needs $475 billion between 2007 and 2012
to upgrade its roads, expand and modernise its ports, improve
rail services and boost power generation.
India's foreign exchange reserves rose to $262 billion at
end-October placing it among the top five in Asia.
((Editing by Ranjit Gangadharan and Gerrard Raven; Reuters
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Keywords: INDIA FINMIN/