Press Esc to close
Thursday 27 July 2017
News updated at 12:47 PM IST

RBI acts to tackle Re volatility

Mumbai, June 15, 2013 DHNS: 2:14 IST
Reuters File Image.
The Reserve Bank of India (RBI) on Monday announced a slew of measures to ensure stability in the foreign exchange market which on macro-level seeks to bring down the country's current account deficit (CAD).

The rupee has depreciated markedly in the last six weeks, although the market perception of likely tapering of US quantitative easing has had triggered outflows of portfolio investment, particularly from the debt segment. This indicated that the demand for dollar against rupee surged owing to improved domestic liquidity situation.

In the given situation, the RBI felt the need to restore stability to the foreign exchange market and announced measures like recalibrating the marginal standing facility (MSF) to be 300 basis points above the repo rate—the rate at which bank borrows money from the RBI for short term use—with immediate effect.

One basis point is the equivalent of one-hundredth of a per cent. Consequently, the MSF rate will now be 10.25 per cent. Also, the bank rate stands adjusted to 10.25 per cent with immediate effect.

The overall allocation of funds under the liquidity adjustment facility (LAF) will be limited to 1 per cent of the net demand and time liabilities (NDTL) of the banking system, which is estimated to be Rs 75,000 crore for this purpose, said the RBI in a statement released in the late hours of Monday.

Even as the allocation to individual banks will be made in proportion to their bids, subject to the overall ceiling, this change in the LAF will come into effect from July 17, 2013.
Further, the apex bank will conduct Open Market Sales of Government of India Securities of Rs 12,000 crore on July 18, 2013. Details of the securities included for the OMO sale auction will be announced through a separate press release on Tuesday.

Meanwhile, the rupee closed at 59.89/90 per dollar against 59.56/57 on Friday last.

Go to Top

Photo Gallery
Bihar Chief Minister Nitish Kumar coming out of Raj Bhawan after meeting Governor KN Tripathi...

Bihar Chief Minister Nitish Kumar coming out of Raj Bhawan after meeting Governor KN Tripathi...

India's Cheteshwar Pujara, left, and Shikhar Dhawan cheer each others during the first day's play...

India's Cheteshwar Pujara, left, and Shikhar Dhawan cheer each others during the first day's play...

Army officers pay homage at the Dras War Memorial on the occasion of Kargil Vijay Diwas, in Dras...

Army officers pay homage at the Dras War Memorial on the occasion of Kargil Vijay Diwas, in Dras...

Indian Women's Cricket team poses for a group photo during a press conference in Mumbai...

Indian Women's Cricket team poses for a group photo during a press conference in Mumbai...

Actor Akshay Kumar at a function organised to celebrate Kargil War Victory Day at Yashwantrao...

Actor Akshay Kumar at a function organised to celebrate Kargil War Victory Day at Yashwantrao...

Sand artist Sudarsan Pattnaik creates five sand sculptures of A P J Abdul Kalam at Puri beach...

Sand artist Sudarsan Pattnaik creates five sand sculptures of A P J Abdul Kalam at Puri beach...

Anant Maheshwari, President, Microsoft India and Rajiv Kumar, Corporate Vice President...

Anant Maheshwari, President, Microsoft India and Rajiv Kumar, Corporate Vice President...

Former Jharkhand Chief Minister Madhu Koda is seen ploughing his field, in Ranchi on Wednesday...

Former Jharkhand Chief Minister Madhu Koda is seen ploughing his field, in Ranchi on Wednesday...

Children move to safer place from a flooded village at Thiba in Birbhum district of West-Bengal...

Children move to safer place from a flooded village at Thiba in Birbhum district of West-Bengal...

Water level rise above danger level in Sipu dam after heavy rains in Deesa on Wednesday...

Water level rise above danger level in Sipu dam after heavy rains in Deesa on Wednesday...

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.