India not to guide rupee for inflation control

"We have no intention to calibrate rupee for purposes of fighting inflation. Our exchange rate is transparent and credible," Nath told reporters here.     

But he said fighting inflation "was not only a necessity but also a priority for the government". Without specifying, the Minister said the government would continue to take necessary steps to check the price rise.     

While rupee had seen a sharp appreciation in 2007-08, it has lost close to nine per cent this fiscal making the landed cost of imports expensive. Some analysts wanted the government to maintain a strong rupee.     

Many of the steps like scrapping import duty on a number of items like edible crude oil, have been neutralised by the rupee losing value. If the trend of rupee loss continues, it could add to the inflation which has hit a 13-year high of 11.05 per cent.     

High crude oil prices are draining government finances and the country's foreign exchange reserves. Rising trade deficit, mainly resulting from expensive crude imports, "is a matter of serious concern," Nath said.

Crude oil prices have shot up from $ 70 per barrel to over $ 130 a barrel since August 2007.