Economic Affairs Secretary Ajay Seth said that the measures announced by the Reserve Bank of India (RBI) to boost foreign fund inflows should positively impact flows, with early signs visible that pressure on the rupee’s exchange rate is easing.
Seth said, “The RBI has taken massive measures. And you would have seen that in the overseas NDF (non-deliverable forwards) market, the rupee has appreciated. So it has caused an impact on sentiment as well as we see it will have a positive impact on flows as well.”
Recently, the central bank announced a series of measures to boost forex inflows and reduce pressure on the rupee’s exchange rate. These measures are temporary and are valid till October. Seth added that considering the nature of challenges, the measures are also transitory.
The immediate impact of the RBI’s steps has not been significant, with the rupee closing just 12 paise higher at 79.18 per dollar on July 7. The RBI’s decisions came in the wake of the rupee hitting successive record lows over the past few days, with an all-time low of 79.36 per dollar. The Indian currency has weakened by 4.5 percent against the dollar so far in FY23 amid global recession risks, high risk aversion, and large policy spill-overs.
