Govt unfolds five ‘mantras’ to defend rupee

Must Read

Sanju Samson to replace Shikhar Dhawan in T20 series against WI

Sanju Samson will replace injured Indian opener Shikhar Dhawan in the T20s series against West Indies starting from next...

Supreme Court lashes out on Centre & Delhi govts for Rising Pollution

The Apex Court of the Country, the Supreme Court on Monday lashed the Central and State Government for their...

Harbhajan Singh wishes BCCI Prez Sourav Ganguly to change Selection Panel

The Indian off-spinner Harbhajan Singh on Monday urged Sourav Ganguly, President of BCCI (The Board of Control for Cricket...

The govt on Friday night announced a set of measures to defend the rupee. The five points will focus on limiting the widened CAD ( current account deficit), encouraging market confidence and strengthening the rupee.

Finance minister Arun Jaitley notified that these five measures intend to contain current account deficit which has heightened till 2.4% of the GDP in June quarter. The decisions were taken after a meeting where PM Modi was briefed by RBI governor Urjit Patel about the on-going economic issues.

Government’s 5-point strategy

  • Limiting Non-Essential Imports and Boosting Exports

The central government is planning to take suitable measures to limit non-essential imports and enhance export. “Necessary decisions will be taken and announced as and when they’re taken,” said Arun Jaitley in a press conference. The government intervention in the forex market is likely to contain the current fluctuating trends.

  • Restriction on Govt’s investments

The government may introduce certain limitation over their investment to raise the number of foreign portfolio investors in the corporate debt market. Jaitley said, “The condition that FPIs’ investment in a single corporate entity cannot exceed 20% of its corporate bond portfolio will be reviewed. The condition that FPIs cannot invest more than 50% of an issue of corporate bonds will also be reviewed.”

  • Exemption on masala bond 

Masala bonds will be excluded from retention tax until the closing of the financial year. Further, Indian bank can act as liquidity providers in masala bonds by underwriting them.

Masala bonds are a financial instrument through which Indian borrowers can raise money from the overseas market in Indian currency. These bonds do not face the adverse effect of currency depreciation.

  • Reviewing condition on infrastructure loan borrowers

The compulsory hedging conditions for infrastructure loans borrowed via ECB (external commercial borrowing) route will be analyzed. Currently, there is no limitation on borrowers.

  • Only one-year term borrowings for Manufacturing companies from ECB

The last measure is to allow manufacturing companies to take borrowings (up to ₹5 Crore) from ECBs for a period of no more than one year.


Please enter your comment!
Please enter your name here

- Advertisement -

Latest News

Ghulam Nabi Azad calls CAB bill “totally unconstitutional”; says Congress will oppose bill in Rajya Sabha

Speaking on the issue of the Citizenship (Amendment) Bill, 2019, Rajya Sabha member and senior Congress leader Ghulam Nabi...

Lok Sabha passes Constitution (One Hundred and Twenty-Sixth Amendment) Bill, 2019, Unanimous decision extends reservation for SCs & STs for 10 years

Lok Sabha cleared the bill for the extension of reservation for SCs (Scheduled Castes) and STs (Scheduled Tribes) on Tuesday for the next 10...

Tejashwi Yadav iterates party’s stand to oppose CAB bill, accuses Bihar CM Nitish Kumar of betraying people of Bihar by supporting bill

Airing his views public for the first time on the recently passed Citizenship (Amendment) Bill, Rashtriya Janata Dal leader Tejashwi Yadav announced his party's...

Raghuram Rajan suggests 11 point approach to revive distressing Indian economy

Former RBI governor Raghuram Rajan warned that sectors of India’s economy are “ticking time bomb”. A term coined by famous author Eduardo Galeano in...

YES Bank to consider Citax offer of $500-mn investment; Erwin Braich’s offer also under discussion

The board decided in the meeting that the final decision for the allotment to Citax Holdings and Citax Investment Group will follow in the next board meeting
- Advertisement -

More Articles Like This