Steps RBI, government can take to stabilise rupee

MUMBAI (Reuters) - The rupee's fall to record lows has raised chances that the Reserve Bank of India will take more steps to support the currency, as a strategy built on tightening rupee money markets and raising short-term interest rates has had limited effect.

The worst performing Asian currency of the year so far hit a new life low of 61.80 rupees per dollar on Tuesday, breezing past a previous low of 61.21 hit on July 8. Central bank intervention helped the rupee recover, but by Wednesday it was sliding once again, to stand around 61.41 by 1:30 p.m.

Below are the possible steps that the RBI or the government could take to support the currency.

RBI ACTIONS

* FX intervention

* Tighten liquidity further by:

- Raising banks' statutory liquidity ratio of 23 percent

- Further reducing how much banks can borrow from the

RBI under the daily repo auction

- Reducing the amount of funds RBI provides to banks under the export refinance scheme at the repo rate

- Bond sales via open market operations

- Raising banks' cash reserve ratio, now at a record low

4 percent

* Raise the policy repo rate, currently at 7.25 percent

* Provide a dollar-window for oil firms to pay for imports

* Buy oil bonds from companies by paying dollars

* Ask exporters to convert FX dollar holdings immediately

* Ask importers to delay or stagger dollar payments

* Curb speculation by cutting net open position limits

* Persuade banks and financial firms to raise funds abroad

GOVERNMENT MEASURES

* Raise foreign investment limits in debt

* Increase duties on non-essential imports, like electronics

* Attract money from Indian citizens abroad, or issue sovereign debt

* Announce additional fiscal, economic reforms

(Reporting by Swati Bhat and Subhadip Sircar; Editing by Simon Cameron-Moore)