New Delhi, according to reports, has been open to issuing Non-Resident India (NRI) bonds or even opening a forex swap window for oil marketing companies, to stem rupee's fall if it became unreasonable.
Despite strong economic growth, the national currency has lost over 11% leading to a widening in current account deficit and balance of payments moving into the red as a consequence of higher oil global prices and emerging markets sell-off that has seen portfolio inflows dwindle.
So far there has been speculation on the measures that the centre could be deploy.
Support measures are expected to be announced after Prime Minister Narendra Modi's meeting with officials.
A day prior to the meeting, the rupee recovered to 71.65 per dollar, it's strongest recovery since 7 Sept. The rupee closed at 72.1950 on Wednesday (Thursday was a holiday).
Although the Rupee moderately gained an edge over the US greenback on Friday, a member from the PM's economic panel suggested that India needed to remain "extremely vigilant" over the Rupee.
A <i>Reuters report</i> said Finance ministry officials believed reducing fiscal deficit was a difficult proposition with India heading into election year, but the government could consider raising import duties on some electronic items and ease rules for foreign investors.
Panel member Rathin Roy maintained on his blog that "Extreme vigilance continues to be required."
He conceded, "the present challenge can be effectively dealt with" if vigilance is exerted, officials communicate effectively, the government maintains its policy stance, and doesn't put other macroeconomic goals at risks through actions like widening the fiscal deficit by lowering taxes, or using interest rates to manage the exchange rate.
Roy, heads National Institute of Public Finance and Policy, a think tank partly funded by the finance ministry, said weak rupee was unlikely to lead to fall in imports due to strong demand, notably for crude oil and electronic items.
Roy also cautioned that any cut in tax rates on petroleum products could widen the fiscal deficit. He said the government should rather focus on minimising the rupee volatility and take structural reforms to boost exports.
Subhash Chandra Garg, economic affairs secretary said on Wednesday the government and the Reserve Bank of India would do "everything to ensure that the rupee does not slide to unreasonable levels."