RBI takes steps to increase dollar inflows

MUMBAI (Reuters) - The Reserve Bank of India (RBI) on Tuesday took measures to increase the supply of dollars in the market including asking exporters to realise their dollar earnings and get them back into the country within one year to support a plunging rupee.

The RBI also hastened the process of dollar inflows through online payment channels by increasing the amount that exporters can bring back to $10,000 from $3000, it said in a separate release on Tuesday.

The new norms will be applicable with immediate effect, the Reserve Bank of India said.

Striking 58.98 per dollar at its weakest, the rupee had plunged 3.25 percent this week, notching record lows for two consecutive days.

These are the first few steps taken by the RBI to send a signal of its intention to protect the rupee through administrative measures. The central bank had done away with the time limit for realisation and repatriation of export proceeds in 2003.

However, dealers said the RBI needs to impose a cap on banks' daily net open position in the forex market, similar to the one done in 2012 to reduce speculative trades in the forex market which is adding to the rupee slide.

(Reporting by Shamik Paul; editing by Ron Askew)