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<\/div>\n<\/div>\n<\/div>\nGiving a major boost to the rupee, Reserve Bank of India (RBI) governor Sanjay Malhotra on Friday announced several steps to attract foreign capital at a time when the US-Iran conflict is putting pressure on India\u2019s external sector resilience.The rupee gained 50 paise against the US dollar on Friday, strengthening to 95.24 after the RBI unveiled measures aimed at easing investment norms for foreign portfolio investors in government securities.Currency market participants said investor confidence improved following the RBI’s policy announcements, particularly after the central bank emphasised that India’s foreign exchange reserves remain strong enough to cushion the economy against external disruptions. In the interbank foreign exchange market, the rupee opened at 95.72 per dollar and later advanced to an intraday high of 95.24, marking a 50-paise appreciation from the previous day’s closing level.As widely anticipated, the Reserve Bank left interest rates unchanged for a second consecutive policy meeting while assessing the economic implications of higher energy prices and supply-side disruptions stemming from the West Asia conflict.Also read | Strengthening forex reserves amid US-Iran war: RBI announces 5 measures to attract foreign capital – check details<\/a><\/p>\n Sanjay Malhotra outlined several initiatives designed to attract foreign capital, strengthen India’s balance of payments position and provide support to the rupee, which has faced pressure in recent months.Among the measures, the RBI expanded the list of securities eligible under the Fully Accessible Route (FAR) by including all new issuances of 15-year, 30-year and 40-year government bonds.The central bank also removed restrictions related to short-term investments, concentration limits and individual security exposure for foreign portfolio investors investing through the General Route.Malhotra said these changes, coupled with the government’s capital gains tax exemption on government securities, should help increase foreign participation in government borrowing programmes.The RBI also announced higher investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in listed equity instruments that can be traded without SEBI registration.Additionally, the central bank will offer a concessional foreign exchange swap facility for public sector undertakings until September 30 to encourage external commercial borrowings by these entities.A similar arrangement will be made available to authorised dealer banks, allowing them to fully cover hedging costs for fresh FCNR(B) deposits with maturities ranging from three to five years until September 30.Further, the RBI said it would restore the export proceeds realization period to nine months.<\/p>\nRBI\u2019s steps to attract foreign capital<\/h2>\n<\/p>\n
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