RBI constitutes task force under Usha Thorat on offshore rupee markets

The RBI Thursday announced a task force headed by its former deputy governor Usha Thorat to examine issues related to offshore rupee markets and recommend policy measures to ensure stability of the external value of the domestic currency.

The eight-member task force will assess the causes behind the development of the offshore rupee market and study the effects of the offshore markets on the rupee exchange rate and market liquidity in the domestic market.

The Reserve Bank of India (RBI) said it would also recommend measures to address concerns, if any, arising out of offshore rupee trading besides proposing measures to generate incentives for non-residents to access the domestic market.

Another point of reference for the task force is to examine the role international financial services centres can play in addressing the concerns.

The central bank further said the panel would be submitting its report by the end of June 2019.

The RBI said it has been guided by the objective of developing deep and liquid on-shore financial markets that act as a price setter of the Rupee globally.

The focus of policy efforts has been to align incentives for non-residents to gradually move to the domestic market while at the same time improving market liquidity to promote hedging activity on-shore while announcing setting up of the task force.