Reserve Bank of India (RBI) on Wednesday additional liberalised norms to spice up inflows of overseas alternate, together with doubling the borrowing restrict underneath the ECB route, amid the rupee falling towards the US greenback.
In an announcement, the central financial institution stated it has been carefully and constantly monitoring the liquidity circumstances within the foreign exchange market and has stepped in as wanted in all its segments to alleviate greenback tightness with the target of making certain orderly market functioning.
The measures taken by the central financial institution comes within the backdrop of rupee depreciating by 4.1 per cent towards the US greenback throughout the present monetary yr thus far (as much as July 5) amid the continuing geopolitical tensions.
“In order to further diversify and expand the sources of forex funding so as to mitigate volatility and dampen global spillovers”, the central financial institution stated it has determined to undertake 5 measures to reinforce foreign exchange inflows whereas making certain total macroeconomic and monetary stability.
The measures embody easing norms for FPI funding in debt market, and rising the External Commercial Borrowing (ECB) restrict underneath the automated route from USD 750 million or its equal per monetary yr to USD 1.5 billion.
