Forex inflows
Some of the measures targeted at improving capital inflows are seen too weak to make any material impact in the short-run as the overall sentiment towards emerging market currencies and asset classes remain negative.
Analysts say policy measures (to ease access to forex) such as short-term external commercial borrowings by corporates and relaxation of hedging rules for infrastructure loans are likely to be too risky and the country may eventually sleepwalk into a deeper current account crisis.
While the recent policy efforts to support rupee may be insufficient, the government and the RBI have the option to resort to some of the tried and tested measures such as issuance of nonresident Indian (NRI) bonds to increase forex inflows and tightening of interest rates to mop up rupee liquidity.