RBI TAKES THE EXPORT ROUTE TO BOOST Re
Article Abstract:
The Reserve Bank of India (RBI) has drawn up a two-pronged strategy to revive the falling rupee and crashing Sensex. The first move is to fill in the gaps left out by the budget by boosting exports and secondly to tackle the self-fulfilling spiral of bearish sentiment. The Reserve Bank has decided to bring in additional dollar inflows and improve market sentiment. This will be done by offering the exporters a one-time, 4.5 percentage point slash in the rupee export credit rate from 11 percent to 6.5 percent for all incremental exports over the base year level of 1997-98. At the same time, the export refinance rate also has been slashed from nine percent to four percent. For exporters planning to avail foreign currency export credit, the spread charged by the banks over the London Inter Bank Offered Rate (Libor) on foreign currency export credit is lowered from 2- 2.5 percent over Libor to 1.5 percent over Libor. These measures are expected to push the export growth proceeds to a 20 percent target set in the Budget for 1998-99. The cash reserve ratio (CRR) kept by the banks with the RBI at four percent will be utilised to extend export credit refinance to banks under the new scheme. As a short term measure, the RBI has asked the foreign institutional investors to buy forward covers for their incremental exports. (gsh)
Comment:
India: Reserve Bank of India has drawn up 2-pronged strategy to revive the falling rupee and crashing Sensex
Publication Name: Economic Times
Subject: Business, international
ISSN: 0013-0389
Year: 1998
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Re GETS POLICY PILL, BOUNCES BACK
Article Abstract:
The Reserve Bank of India has come out with dire tonnes and indirect measures to stop speculation on the rupee by importers. The cash reserve ratio has been increased by 1 percent while its daily fixed rate repo has been increased by three percentage points. The measures aim at removing excess liquidity from the market and to hike forward premium rates. Foreign institutional investors will be permitted to hedge 15 percent of their portfolio investments made before June 11, 1998. Importers have been barred from rebooking cancelled forward contracts. Exporters have been told that their entitlements in Exchange Earners Foreign Currency would be reduced if they knowingly delayed repatriation of export proceeds. (khr)
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India: Reserve Bank comes out with dire tonnes and indirect measures to stop speculation on rupee by importers
Publication Name: Economic Times
Subject: Business, international
ISSN: 0013-0389
Year: 1998
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JALAN BLAMES IT ON ASIAN CRISIS
Article Abstract:
The Indian government is reviewing the present stock market crisis and the rupee depreciation against the US dollar. Mr Bimal Jalan, the governor of the Reserve Bank of India (RBI) has opined that crisis in stock market and depreciation in rupee value are in because of external factors such as crisis in the Asian market and the weakening of the Yen. The RBI has assured the government that it will monitor the situation and make periodic interventions to curb speculative pressures. (gs)
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India: Government is reviewing present stock market crisis and the rupee depreciation against the US dollar
Publication Name: Economic Times
Subject: Business, international
ISSN: 0013-0389
Year: 1998
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- Abstracts: ELECTRONICS GETS EXPORT BOOSTER FILM SECTOR SEES SILVER STREAK PSU POWER Cos GET BOOSTER
- Abstracts: CREDIT CARDS TO THE RESCUE OF FILMS. UNITED STUDIOS GETS A NEW NAME
- Abstracts: B RSENS REKLAMEBAROMETER DENMARK: ROAMING RATES TO BE REDUCED. DENMARK: SONOFON INCREASES NUMBER OF CUSTOMERS
- Abstracts: SBI PUTS RIB PROCEEDS INTO GOVT SECURITIES SBI GETS INTO SWAP MODE RBI HIKES YIELDS ON GOVT PAPER