NEW DELHI: India is looking at ways to attract new capital flows from foreign investors as a way to bolster its ailing currency, a senior finance ministry official said on Monday.

India's rupee hit an unprecedented string of all-time lows last week, falling as low as 56.38 to the dollar but it rose on Monday to a one-week high of 55.18 rupees as investors took profits on the greenback.

The government is expected to announce this week steps that could include easing rules for overseas retail investors to buy local shares or bonds, the official, who did not wish to be named, told reporters.

The government will also conduct road shows in the Gulf countries next month to promote investments in India, he said.

India draws major remittances from Indians living abroad, especially in the Gulf countries, and officials believe there may be scope to attract more money from the region to help support the rupee.

However, analysts say while such measures might help the currency temporarily, they are not a long-term solution to the rupee's weakness which reflects concern over slowing growth and gaping fiscal and trade deficits.

Analysts said the government needs to press ahead with long-delayed reforms such as further opening up the retail and aviation sectors to foreign investment.

Prime Minister Manmohan Singh's second term in office has been tainted by a series of policy U-turns and corruption scandals and his once ambitious reform agenda has stalled amid coalition infighting.

Government measures announced in January to draw new foreign investors have been largely unsuccessful. It raised the investment cap in infrastructure bonds, but just $1.5 billion of the $25 billion limit has been taken up so far.

Indian brokerage Emkay forecasts the currency could drop to 60 rupees to the dollar if weak economic growth persists. The currency has fallen nearly 10 percent against the dollar since mid-March.

The government has forecast growth of 7.6 per cent for this fiscal year to March 2013. But economists are predicting six to seven per cent growth, enviable by Western standards but not enough to reduce India's crushing poverty, experts say.