The government has ruled out putting controls on FII inflows into the equity market as of now, but said that RBI may intervene to check the rupee appreciation if needed.

“At this time, I am not thinking of putting cap on FIIs (inflows in equity market),” Finance Minister Pranab Mukherjee told reporters at the annual Economic Editors Conference in New Delhi.

This year, the FII inflows have already reached USD 24.48 billion. Of this, FIIs pumped in USD 6.11 billion, about 25 per cent of the total inflow so far, in the month of October alone.

The current levels of capital inflows, which exceed financing requirements of the current account deficit, have put pressure on the rupee, resulting in its appreciation over the last few months.

Mukherjee said the rising rupee has implications for exports.

RBI is keeping an eye on it and will take action if needed, he added.

“We have faced similar situation in the past and have overcome it without taking recourse to some of the more stringent policy measures that are by now well known to discerning analysts,” Mukherjee said.

The upward movement of the rupee against the US dollar was sharp in recent weeks as the Indian currency has climbed about 5.6 per cent since the beginning of September due to sustained capital inflows.