Faced with a high current account deficit and declining forex reserves, Finance Minister P. Chidambaram in his forthcoming US visit will meet FIIs in San Fransisco to woo investments.
The Minister will be in the United States to attend the Annual Meetings of the International Monetary Fund (IMF) and the World Bank beginning October 9.
The US programme of Mr. Chidambaram also include a meeting with the Treasury Secretary Jacob Lew and other officials on October 13, sources said.
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Following that he would meet Foreign Institutional Investors (FIIs) and hedge fund managers at San Fransisco on October 14.
“The Minister is scheduled to meet large fund managers during his US visit next month to attract investments,” sources said.
His US visit comes at a time when the country is facing pressure on the external sector with the foreign exchange reserves dipping by over USD 17 billion since March, 2013 to USD 274.8 billion as on September 6.
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Besides, the government and the Reserve Bank are also struggling to curb volatility in the forex market and arrest declining value of rupee, which had touched life time low of 68.86 to a dollar on August 28. The rupee on Friday closed at 63.48 to a dollar.
The Prime Minister’s chief economic advisor C. Rangarajan has said the government may have to drawdown USD 9 billion of foreign reserves to bridge the Current Account Deficit (CAD).
The CAD, which is the difference between the inflow and outflow of foreign exchange, had soared to a record high of USD 88.2 billion or 4.8 per cent of GDP in 2012-13.
In the current year the CAD is expected to come down to USD 70 billion or 3.8 per cent of GDP.
The pressure, however, will continue on the external sector with portfolio investments expected to dip sharply to USD 2.7 billion this fiscal from USD 27 billion a year ago.
The overall capital flows, which include FDI, FII and ECBs, are expected to come down to USD 61.4 billion in 2013-14 from USD 89.4 billion a year ago.