India’s new Reserve Bank governor Raghuram Rajan announced a spate of measures to defend the currency
The rupee had seen sharp gains yesterday on hopes that Dr Rajan will unveil a new strategy for the rupee, but traders were surprised that the governor came up with a plan so swiftly.
- Dr Rajan outlined plans to attract more funds from overseas by subsidising hedging costs for banks and making it easier for importers and exporters to hedge currency risk.
- He said the RBI will attract more funds from non-resident Indians (NRIs)
- RBI to offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians
- Also offer forex swap into rupees at a concessional rate below market levels for banks that raise dollar funds through overseas borrowings
- Will look to liberalise markets, including pushing for more rupee trade settlement, introducing new financial products such as overnight interest rate swaps and removing curbs on opening new branches by Indian banks, he added
h/t to Amit in the comments!
