NRIs now allowed to carry Indian currency up to Rs 25,000 out of India

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NRIs now allowed to carry Indian currency up to Rs 25,000 out of India
The Reserve Bank of India (RBI) today in its Monetary Policy allowed Non Resident Indians (NRIs) to carry up to Rs 25,000 in Indian currency out of the country.

At present, only Indian residents are allowed to take Indian currency notes up to Rs 10,000 out of the country.

Non-residents visiting India were not permitted to take outside India any Indian currency notes while leaving the country.

"With a view to facilitating travel requirements of non-residents visiting India, it has been decided to allow all residents and non-residents except citizens of Pakistan and Bangladesh to take out Indian currency notes up to Rs 25,000 while leaving the country. Operating guidelines in this regard are being issued separately," the RBI said in its Monetary Policy Review.

With a view to improving the depth and liquidity in the domestic foreign exchange market, the country's central bank also decided to allow foreign portfolio investors to participate in the domestic exchange traded currency derivatives market to the extent of their underlying exposures plus an additional US$ 10 million.

Furthermore, it has also been decided to allow domestic entities similar access to the exchange traded currency derivatives market. Detailed operating guidelines will be issued separately, the RBI has stated.

Today's liberalised measures come in the wake of a fast declining current account deficit of the country. For the year 2013-14 as a whole, India's current account deficit (CAD) narrowed sharply to 1.7 per cent of GDP, primarily on account of a decline in gold imports, although other non-oil imports also contracted with the weakening of domestic demand, and there was some pick-up in exports. In April 2014, the trade deficit narrowed sharply due to resumption of export growth after two consecutive months of decline, and the ongoing shrinking of import demand. Robust inflows of portfolio investment, supported by foreign direct investment and external commercial borrowings, kept external financing conditions comfortable and helped add to reserves.

Read more about: nris, currency, monetary policy
Story first published: Tuesday, June 3, 2014, 11:49 [IST]
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