RBI eases rules for exporters to access FX market
MUMBAI (Reuters) - The Reserve Bank of India (RBI) has allowed exporters to access the foreign exchange market without having to first exhaust funds in their foreign currency accounts, reversing a previous restriction imposed to prevent a sharp fall in the rupee.
The move was triggered by operational difficulties faced by these account holders, the RBI said on Tuesday.
In May 2012, the RBI mandated exporters to sell half of their foreign currency earnings and buy rupees instead of holding them in their exchange earner's foreign currency account (EEFC).
The rupee had been hitting record lows due to global risk aversion and foreign investors' concerns over India's sluggish growth and lack of reforms.
In late June 2012 the currency touched a record low of 57.32 to the dollar.
"This move shows that the RBI is probably comfortable with the rupee's level and may further ease restrictions," said a foreign exchange trading head at a private bank.
The rupee hit a near three-month high of 53.3750 per dollar on Tuesday, before closing at 53.81/82.
(Reporting by Neha Dasgupta)
- Tweet this
- Share this
- Digg this
- China building South China Sea island big enough for airstrip - report
- Obama to be chief guest at Republic Day celebrations
- Pakistani family sentenced to death over "honour killing" outside court
- China's rate-cut likely to hurt banks, curb new loans to small borrowers
- Long "to do" list for Modi as clock ticks on reform
Prime Minister Narendra Modi has a long list of pro-growth measures to implement over the next four months, but time may have already run out to breathe enough life into the economy to meet the tough 2014/15 fiscal deficit target without cuts. Article