Amid Rising Inflation, RBI Announces Measures to Bolster Rupee, Foreign Investments

Earlier in the day, the  RBI decided to increase the limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion.

Mumbai: Amid rising inflation in the country, the Reserve Bank of India (RBI) on Wednesday announced a slew of measures to bolster the rupee and attract foreign investments. Some of these major measures include relaxations on cash reserve ratio (CRR) and statutory liquidity ratio (SLR) on incremental FCNR(B) and NRE term deposits, easing rules for FPIs, and raising limits on external borrowings.

In the recent past, the Indian rupee was witnessing a downward trend and has touched its all-time lows multiple times. The rupee has also hit its record low of 79.38 to a dollar on Tuesday.

The RBI also announced other measures to increase forex inflows including temporarily permitting banks to raise fresh FCNR(B) and NRE deposits without reference to the extant regulations on interest rates.

Some of the other measures announced by the RBI also included allowing foreign investors to invest in short-term corporate debt and allowing the purchase of more government securities under the fully accessible route.

The announcement of measures came from the RBI just days after the central government raised import duties on gold, apart from increasing levies on exports of petrol and diesel in an attempt to control a fast-widening current account gap.

 The RBI has also decided to increase the limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion.