- Sponsored -
The government has announced five measures to curb the falling value of rupee. The Prime Minister Narendra Modi had an economic review meeting with Finance Minister Arun Jaitley and they took five decisions to address the issue of the current account deficit.
- Sponsored -
Mandatory hedging conditions for infrastructure loans through the external commercial borrowing (ECB) route will be reviewed and a 20% exposure limit will be removed on investments by foreign portfolio investors in debt to a single corporate group.
Government will permit the manufacturing sector to access ECBs up to $50 million with residual maturity of one year instead of three years. Masala bonds will be exempted from withholding tax this financial year and Indian banks will be allowed to become market makers in masala bonds including by underwriting. Jaitley added, “government will take efforts to reduce non-essential imports,” Livemint quoted him saying.
Finance secretary Hasmukh Adhia, economic affairs secretary Subhash Chandra Garg and RBI governor Urjit Patel were also present for the meeting.
Livemint furthur quoted Jaitley saying, “External factors like policy decisions taken by the US that is seeing the dollar strengthen, global crude prices and trade wars are impacting us despite India having strong macroeconomic fundamentals.”
Economic affairs secretary Subhash Chandra Garg told CNBC-TV18 that the five measures will have an impact of around $8-10 billion.
Because of falling value of rupee and increasing prices of petrol and diesel, Congress had led a Bharat Bandh on Monday. The rupee has depreciated more than 12% so far this year on a widening current account deficit and higher oil prices.
The domestic currency is trading at Rs 72.10 against the US dollar, compared to its Wednesday closing of Rs 72.19.
Also read: Rupee depreciates, fuel prices soar; no respite for common man
- Sponsored -
