RBI announces measures to boost forex inflows


Mumbai : The Reserve Bank of India (RBI) announced a slew of measures to boost foreign exchange (forex) inflows amid a slump in the value of rupees. The Reserve Bank 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 dollar tightness with the objective of ensuring orderly market functioning, the RBI said in a statement. In order to further diversify and expand the sources of forex funding so as to mitigate volatility and dampen global spillovers, it has been decided to undertake measures to enhance forex inflows while ensuring overall macroeconomic and financial stability, the central bank said. In a bid to boost forex inflows the RBI has announced an exemption from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on incremental Foreign Currency Non-Resident (Bank) and Non-Resident (External) Rupee deposits. At present, banks are required to include all Foreign Currency Non-Resident (Bank) [FCNR(B)] and Non-Resident (External) Rupee (NRE) deposit liabilities for computation of Net Demand and Time Liabilities (NDTL) for maintenance of CRR and SLR. “It has been decided that with effect from the reporting fortnight beginning July 30, 2022, incremental FCNR(B) and NRE deposits with reference base date of July 1, 2022, will be exempt from the maintenance of CRR and SLR,” the RBI said in a statement. This relaxation will be available for deposits mobilised up to November 4, 2022.