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RBI eases forex rules to defend currency

Published on July 07, 2022
Current Context: The Reserve Bank of India announced a series of steps to boost foreign exchange inflows to increase the value of the rupee against the dollar.
RBI eases forex rules to defend currency
  • It includes doubling the annual overseas borrowing limits for companies to $1.5 billion and temporarily abolishing interest-rate caps for banks.
  • Economists have estimated India’s current account deficit, and financial flows with other nations, to widen to more than 3% of GDP this fiscal.
  • The rupee has depreciated by 4.1% against the dollar during the current fiscal which is modest relative to other emerging market economies.
  • Apart from that, RBI also exempted banks from maintaining cash reserve ratio and statutory liquidity ratio on incremental foreign currency and rupee-denominated term deposits.
  • RBI allowed new issuances of 7-year and 14-year government securities under the fully accessible route. Currently, only 5-year, 10-year, and 30-year G-secs are available.
  • RBI also relaxed norms on residual maturity for FPI investments in government and corporate debt.


Q.1 Recently RBI has allowed for the issuance of ______& ______ years of government securities?
a. 7 & 13
b. 7 & 14
c. 7 & 15
d. 5 & 12
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