Mumbai: The government and the Reserve Bank of India are debating introduction of a new scheme to mobilize foreign exchange deposits from Non-Resident Indians (NRIs) and overseas investors to stem the rupee’s slide and boost dollar inflows into India.
The scheme, sources indicated, could be modeled on the Resurgent India Bond of 1998 and India Millennium Deposit of 2000 that sought to channelize NRI savings into India. The two measures had mobilized $10 billion or about 6 percent of the country’s current foreign exchange reserves.
The rupee, which hit a record low of 57.32 against the dollar on June 22, has slid 12 percent since March. A weak rupee has stoked inflation by knocking up prices of most imported goods, including crude oil.
Besides making overseas travel and education costlier, a depreciating rupee is also a warning sign of dipping investor sentiments.