No New De­posit Schemes for Non-res­i­dents

The Economic Times - - Rbi Monetary Policy -

Mum­bai: Re­serve Bank of In­dia has ruled out any new non-res­i­dent de­posit scheme to at­tract dol­lars while the spe­cial dol­lar-rais­ing fa­cil­ity un­der for­eign cur­rency non-res­i­dent (bank), or FCNR(B), scheme it of­fered in 2013 will start ma­tur­ing from Septem­ber.

There would be out­flows of dol­lars and Gover­nor Raghu­ram Ra­jan said RBI is pre­pared for it. The spe­cial scheme helped achieve a record $34 bil­lion of dol­lar in­flows be­tween Septem­ber and Novem­ber 2013. “The good news is we are fully pre­pared for what­ever exit takes place and we will mon­i­tor mar­ket con­di­tions. We think, at this point, that we don’t an­tic­i­pate volatil­ity, but if there is, we will deal with it,” Ra­jan said.

He does not ex­pect a sub­stan­tial rollover as the favourable terms of­fered in Septem­ber 2013 will cease to con­tinue. “We an­tic­i­pate that it will not be re­newed be­cause we are not go­ing to of­fer the same favourable terms again. So, we are es­ti­mat­ing a fairly low rollover rate on the FCNR,” Ra­jan said at the post­pol­icy me­dia con­fer­ence on Tues­day.

The­cen­tral­bankhad­come­outwithan ex­tra­or­di­nary scheme for FCNR(B) de­posits in Septem­ber 2013 to at­tract for­eign cur­rency in­flows to sta­bilise the value of the ru­pee, which had then touched a low of al­most ₹ 69 to the dol­lar.

Ra­jan does not ex­pect sub­stan­tial rollover as the favourable terms of­fered in Sept 2013 will cease to con­tinue

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