RBI takes steps to boost forex inflows

The Reserve Bank of India (RBI) on Friday announced measures to augment foreign currency inflows, following a sharp fall in the rupee in recent sessions.

The RBI relaxed the interest rate ceiling on foreign currency non-resident (FCNR) deposits of banks with maturities of one  year to less than three years to 200 basis points above the Libor or swap rate, from 125 basis points now.

On three- to five-year maturity FCNR deposits, the rate ceiling will be relaxed to 300 basis points above LIBOR.

The RBI also allowed banks to freely determine the interest rates on export credit in foreign currency.

The measures will be effective from Saturday.