Shoring Up Early

RBI’s measures to attract dollars are a prudent call. Good news is that commodity prices are falling

RBI on Wednesday introduced a set of measures to encourage-foreign exchange inflows. They aim to ensure macro-economic-stability and, therefore, are temporary in nature. They will work mainly through three channels. Incremental deposits raised till November through FCNR and NRE don’t have to meet regulatory requirements such as cash reserve ratio which makes it a relatively more attractive option for banks. There’s another set of measures to attract foreign portfolio investment (FPI) into debt. Plus, conditions that need to be met by Indian firms planning to raise debt abroad have been eased.