Mumbai: the rupee Falling to record lows has raised the likelihood that the Reserve Bank of India will take more steps to support the currency, as the strategy is based on strengthening rupee increased money markets and short-term interest rates have limited effect.
Worst performing Asian currency year to date hit record low life 61.80 rupees per dollar on Tuesday, breezing past the previous low of 61.21 hit on 8 July. Central Bank intervention helped the rupee recover, but on Wednesday he again, sliding stand about 61.35 11: 0000.
Here are some steps that the Government might or RBI accept in support of the currency.
RBI ACTION
Reuters* Foreign exchange interventions
* Tighten the liquidity:
-Increase in the statutory liquidity of banks 23 per cent
-Further reducing how much banks can borrow from
The RBI under daily REPO auctions
-Reduction scheme provides banks the RBI refinancing export rate repo
-Bond sales through open market operations
-Cash reserve ratio of banks ' breeding, now at a record low 4 percent
* Increase the repo rate, currently at 7.25%
* Provide dollar window for the oil companies to pay for imports
* Buy Bonds of companies pay $ oil
* Ask exporters to convert FX dollar holdings immediately
* Ask importers to postpone or stretch the dollar payments
* Curb speculation by cutting off the net open position
* Convince banks and finance companies to raise funds abroad
THE MEASURES TAKEN BY THE GOVERNMENT
* Increase foreign investment limits in debt
* Increased duties on imports of non-essential, as electronics
* To attract money from Indian nationals abroad, or to issue sovereign debt
* Announce additional financial, economic reforms
Reuters
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