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Finance Ministry to Consider NRI Schemes to Save the Rupee


As the rupee hits a new record low of 72.67/dollar on Monday, the Finance Ministry is looking at options to encourage overseas Indians to invest in the country.

The Reserve Bank of India (RBI) on Friday reported a $15.8 billion current account deficit for the April-June 2018 quarter, the country's worse in five years, which is discouraging foreign investors who are already scrutinizing emerging market economies with worsening balance of payments.

Finance Ministry to Consider NRI Schemes to Save the Rupee

The effect of currency meltdown in Argentina and Turkey in August started spreading to other EMs. A new analysis by Nomura Holdings Inc now shows that Sri Lanka, South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine are at the highest risk of an exchange-rate crisis, while Brazil, Bulgaria, Indonesia, Kazakhstan, Peru, Philippines, Russia and Thailand are the lowest.

Additionally, the increased consumption of oil in India that has jumped by 76 percent in July from a year ago period, will be putting way too much pressure on the import bill this fiscal year.

Concerns over a further widening of the trade deficit and the strengthening of the US dollar are hurting the rupee severely. Taking note of the situation, the government has grown aware of the crisis and is looking at ways to boost direct foreign investments, a Bloomberg report said citing an unidentified government official. It further said that the ministry was looking at NRI (non-resident Indian) bonds to raise foreign currency deposits amid the erosion of foreign reserves of the central bank from $426 billion in April to $400 billion.

Read more about: nri rupee
Story first published: Monday, September 10, 2018, 16:27 [IST]
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