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    RBI announces steps to revive rupee

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    RBI announces steps to revive rupee
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    Mumbai: The Reserve Bank of India (RBI) Monday announced a series of measures, including raising limits for external commercial borrowings and government securities, that would help revive the battered currency and the economy.

    The Reserve Bank of India said in a statement that it has taken measures in consultation with the government to liberalise capital account transactions.

    It has been decided to allow Indian companies in the manufacturing and infrastructure sector and earning foreign exchange to avail of external commercial borrowing (ECB) for repayment of outstanding rupee loans towards capital expenditure and/or fresh Rupee capital expenditure under the approval route, the RBI said.

    "The overall ceiling for such ECBs would be $10 billion," the central bank said.

    The existing limit for investment by Securities and Exchange Board of India (SEBI) registered foreign institutional investors (FIIs) in government securities (G-Secs) has been enhanced by a further amount of $5 billion.

    This would take the overall limit for FII investment in G-Secs from $15 billion to $20 billion.

    "In order to broad base the non-resident investor base for G-Secs, it has also been decided to allow long term investors like Sovereign Wealth Funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks to be registered with SEBI, to also invest in G-Secs for the entire limit of $20 billion," the RBI said.

    The sub-limit of $10 billion (existing $5 billion with residual maturity of 5 years and additional limit of $5 billion) would have the residual maturity of three years.

    IANS

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