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With reference to the Reserve Bank of India (RBI), consider the following statements:
1. The Reserve Bank of India (RBI) announced a slew of temporary measures aimed at boosting foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates and removal of interest rate ceilings for NRIs’ foreign currency deposits.
2. The RBI temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
With reference to the Reserve Bank of India (RBI), consider the follow...
The Reserve Bank of India (RBI) announced a slew of temporary measures aimed at boosting foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates and removal of interest rate ceilings for NRIs’ foreign currency deposits.
- The move comes as persistent capital outflows and a widening trade deficit have led to a sharp depreciation in the Indian rupee to new lows against the dollar.
- 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.
- As part of the measures, banks have been exempted from maintaining the stipulated Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on incremental FCNR(B) and NRE term deposits mobilised up to November 4.
- It also freed banks to temporarily raise fresh FCNR(B) and NRE deposits without reference to extant regulations on interest rates, with effect from July 7 and up to October 31, 2022.
- To encourage foreign portfolio investment into debt, the RBI said the choice of government bonds available for investment under the fully accessible route (FAR) would be widened, with all new issuances of G-Secs of 7-year and 14-year tenors, including the current issuances of 7.10% GS 2029 and 7.54% GS 2036, designated as specified securities.
- The RBI also temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.
Hence both statements are correct.
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Community Answer
With reference to the Reserve Bank of India (RBI), consider the follow...
Explanation:
1. RBI's temporary measures to boost foreign exchange inflows:
- The first statement is correct. The RBI announced temporary measures to boost foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates.
- Additionally, the RBI removed interest rate ceilings for NRIs' foreign currency deposits to attract more foreign funds into the country.
2. Temporary doubling of annual limit for External Commercial Borrowings (ECB):
- The second statement is also correct. The RBI temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.
- This move was aimed at facilitating more foreign borrowings by Indian companies to help them meet their financing needs during the economic slowdown caused by the COVID-19 pandemic.
Therefore, both statements are correct as per the recent measures announced by the Reserve Bank of India to address the challenges posed by the pandemic and boost foreign exchange inflows.
1. RBI's temporary measures to boost foreign exchange inflows:
- The first statement is correct. The RBI announced temporary measures to boost foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates.
- Additionally, the RBI removed interest rate ceilings for NRIs' foreign currency deposits to attract more foreign funds into the country.
2. Temporary doubling of annual limit for External Commercial Borrowings (ECB):
- The second statement is also correct. The RBI temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.
- This move was aimed at facilitating more foreign borrowings by Indian companies to help them meet their financing needs during the economic slowdown caused by the COVID-19 pandemic.
Therefore, both statements are correct as per the recent measures announced by the Reserve Bank of India to address the challenges posed by the pandemic and boost foreign exchange inflows.
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With reference to the Reserve Bank of India (RBI), consider the following statements:1. The Reserve Bank of India (RBI) announced a slew of temporary measures aimed at boosting foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates and removal of interest rate ceilings for NRIs’ foreign currency deposits.2. The RBI temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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With reference to the Reserve Bank of India (RBI), consider the following statements:1. The Reserve Bank of India (RBI) announced a slew of temporary measures aimed at boosting foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates and removal of interest rate ceilings for NRIs’ foreign currency deposits.2. The RBI temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to the Reserve Bank of India (RBI), consider the following statements:1. The Reserve Bank of India (RBI) announced a slew of temporary measures aimed at boosting foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates and removal of interest rate ceilings for NRIs’ foreign currency deposits.2. The RBI temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Reserve Bank of India (RBI), consider the following statements:1. The Reserve Bank of India (RBI) announced a slew of temporary measures aimed at boosting foreign exchange inflows, including a doubling in the overseas borrowing limit for corporates and removal of interest rate ceilings for NRIs’ foreign currency deposits.2. The RBI temporarily doubled the annual limit for External Commercial Borrowings (ECB) to $1.5 billion or its equivalent.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
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