May 10, 2012, 12.30 PM | Source: CNBC-TV18
The Reserve Bank of India said exporters will be required to convert 50% of their foreign exchange holdings into rupees, in a move that traders say could boost the sagging local currency.
Exporters will also be allowed to buy foreign currency only after utilizing all the foreign currency holdings in their accounts.
The move to curb excessive position-taking sent the rupee up to 53.59/60 to the dollar around 53.90 in opening trade.
According to RBI, the Exchange Earners' Foreign Currency (EEFC) account holder can buy forex after existing balance has been used. It says exporters should convert 50% of forex earnings.
Sources say half of EEFC means USD 2.5 billion should be converted in two weeks.
Currently the RBI cap on open position at 5 times of available limit.