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Jun 26, 2012, 11.39 AM IST
INDIA-RUPEE-MEASURES-RBI:FACTBOX - Steps taken by India to support rupee
The rupee rallied earlier after Finance Minister Pranab Mukherjee said the government will unveil steps to arrest the currency's slide, but it trimmed gains on disappointment the measures were not aggressive enough.
June 25 - The Reserve Bank of India (RBI) raised the investment limit for foreign institutional buyers in government debt by $5 billion to $20 billion. However, the additional limit can be invested only in bonds of three years and above.
It also allowed sovereign wealth funds, multi-lateral agencies, foreign central banks and insurance, pension and endowment funds to buy federal bonds.
RBI reduced the lock-in period of investment to three years from five for foreign investment in government bonds for up to $10 billion, including the additional $5 billion.
June 25 - The RBI said manufacturing and infrastructure companies can raise money overseas via external commercial borrowings by an additional $10 billion to meet capital expenditure and repay rupee loans.
The central bank also allowed qualified foreign investors to invest in mutual fund schemes with 25 percent of assets in the infrastructure sector under the current $3 billion sub-limit. Earlier 100 percent of the investment had to be in infrastructure assets.
May 21 - The RBI said net overnight rupee open position limit for Indian banks shall not include positions taken in the currency futures and options segment, thereby reducing speculative trading in the foreign exchange market.
The central bank also said positions taken in the futures and options markets cannot be offset by undertaking positions in the over-the-counter market and vice-versa.
May 10 - RBI said exporters must cash in 50 percent of dollar holdings in their accounts within two weeks, to help ease tight supplies.
The RBI also mandated that exporters should exhaust the available dollar balance in their accounts before raising fresh funds from the markets.
May 10 - The RBI allowed intraday trading at five times the net overnight open position limit of the bank or the central bank-approved intraday limit, whichever is higher, allowing banks to take larger positions.
Earlier, traders could not exceed the overnight limit.
May 9 - The central bank eased rules for using foreign currency deposits, by allowing banks to use foreign currency non-resident (FCNR) deposits as collateral against loans to local residents.
May 7 - The government deferred a controversial tax proposal, which had chilled capital inflows, though foreign investors have demanded more clarity about the guidelines.
May 4 - The RBI relaxed the interest rate ceiling on FCNR deposits with maturities of 1 year to less than 3 years, to 200 basis points above the LIBOR or swap rate from 125 basis points.
On 3 to 5-year maturity FCNR deposits, the rate ceiling was relaxed to 300 basis points above LIBOR.
The central bank also allowed banks to freely determine the interest rates on export credit in foreign currency.
(Reporting by Shamik Paul in MUMBAI; Editing by Aradhana Aravindan)
Jun 19 2013, 23:15
- in MARKET OUTLOOK
Jun 19 2013, 12:44
- in MARKET OUTLOOK