More steps to stem rupee fall In a concerted effort to manage the current account deficit and defend the rupee, the government and the Reserve Bank of India (RBI) stepped in with further measures on Wednesday. While the RBI clamped down on capital outflow with tighter investment and remittance limits abroad for companies and individuals, the government banned the import of gold coins and medallions. The ban comes even as gold imports rose to 47.6 tonnes in July, up from 31 tonnes in June. Gold coins and bars comprised 36 per cent of the total gold import in 2012. The RBI has reduced the limit for overseas investment through the automatic route by an Indian company by a third, from 400 per cent to 100 per cent of the company’s net worth. In the case of individuals, the limit under the liberalised remittance scheme (LRS) has now been brought down to $75,000 a year from $200,000 even as they have been banned from using the LRS for acquiring immovable property abroad. The restrictions on dollar outflows is a part of the continuing efforts of the RBI to stem the slide in rupee, which has remained stubbornly below 61 a dollar despite several rupee-draining measures in the past few days. The central bank also raised interest rates on FCNR (Foreign currency non-resident) deposits. Meanwhile, headline inflation rebounded to 5.79 per cent in July from 4.86 per cent in June.
Posted on: Thu, 15 Aug 2013 05:00:15 +0000
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