Dow Jones Newswires: India’s central bank takes steps to stem rupee’s slide

by | Jul 6, 2022 | Stock Market

By P.R. Venkat India’s central bank has relaxed debt-market rules for foreign portfolio investors and allowed commercial banks to raise interest rates on non-residents’ foreign-currency deposits in a bid to support the rupee and boost forex reserves.

“The Reserve Bank [of India] has been closely and continuously monitoring the liquidity conditions in the forex market and has stepped in as needed in all its segments to alleviate [U.S.] dollar tightness with the objective of ensuring orderly market functioning,” it said late Wednesday. The RBI said that the measures are aimed at diversifying and expanding the sources of forex funding so as to mitigate volatility and dampen global spillovers. The rupee has fallen 4.1% against the dollar since the start of the current fiscal year that began in April, the central bank said. The Indian currency fell to a record intraday low of around 79.56 against the dollar on Wednesday, according to FactSet. The rupee was last trading little changed against the greenback at about 79.01 on Thursday. The central bank said that high risk aversion in financial markets had led to great volatility and selloffs in risk assets. “As a result, emerging-market economies are facing retrenchment of portfolio f …

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