Updated By: LatestGKGS Desk
Govt. Of India: Steps for the stability of Indian Rupee INR vs USD
For the past few years, the Central Government has announced some measures to bring stability in the rupee and reduce the current account deficit to improve the falling level of rupees against the dollar. Its goal is to bring the economy down on a deficit reduction.
Measures for the stability of rupees
1. Reduction of unnecessary imports: measures to control non-essential imports and promote export has been taken. To reduce the current account deficit, the government will endeavour to reduce the import of non-essential goods.
2. Review of restrictions on overseas portfolio investors: From simplifying rules related to foreign commercial borrowings (ECB), measures have been taken to promote participation of foreign portfolio investors in the corporate bond market.
3. The banks issuing the spice bonds are not banned: Government will extend the exemption to all the issuing corporations till March 31, 2019, to increase the purchase of the spice bonds to the Indian corporations.
4. Manufacturing companies are allowed to access the ECB up to $ 50 million: Manufacturing companies borrowing up to $ 50 million through ECB will be able to do this for a period of one year only. It is notable that earlier this permission was for a period of three years.
5. In the context of ECB, review of compulsory hedging conditions for infrastructure loan: Compulsory hedging (financial loss prevention) conditions will be reviewed for the infrastructure structure loan through the ECB route. Significantly, there is no obligation on borrowers to handle these loans at present.
