MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA)
(a): The Indian business houses/companies having their ventures abroad are
likely to be affected by unfolding of the Euro Zone crisis. Depreciation
of Rupee could increase the cost of foreign currency debt service in Rupee
terms. However, Rupee depreciation, could also increase the value of
incoming dividend/profits, remittances in Rupee terms.
(b): A number of steps have been taken to stabilise the Rupee and shore up
the capital market. The recent policy initiatives include inter alia, increase
in all-in-cost ceiling for trade credits; liberalization of External Commercial
Borrowing norms; requirement to bring into the country proceeds of ECBs raised
abroad for Rupee expenditure; raising of FII investment limit in corporate and
Government securities and raising of interest rates on Non-Resident Indian
Deposits. In order to augment dollar supply, the Reserve Bank also lifted the
US$ 100-million cap placed on banks` net foreign exchange supply position in
the market.