Opinion was divided within the government on whether ‘import-compression’ ought to be ensured through physical controls, that is, an outright ban, or ensured through price signals, that is, the devaluation of the rupee. Finance Minister Manmohan Singh tilted in favour of using the exchange rate rather than import bans. Over the financial year 1990-91 the rupee had already depreciated by around 11 per cent, but it was now felt that a one-time sharp adjustment would stabilize the rupee by renewing confidence in it. On 1 July, the rupee was devalued by around 9 per cent and on 3 July there was a
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