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ARTICLE · 22 JULY 2022

RBI Announces Various Measures To Liberalise Forex Flows In India

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In the backdrop of the Indian Rupee (INR) continuously depreciating against the US dollar (USD), the Reserve Bank of India (RBI) on 6 July 2022, issued a press release on ‘Liberalisation of Forex Flows...

IndiaGovernment, Public Sector
Rajeev Vidhani
Rajeev Vidhani
Rolwine Alva
Rolwine Alva
Manas Pandey
Manas Pandey
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In the backdrop of the Indian Rupee (INR) continuously depreciating against the US dollar (USD), the Reserve Bank of India (RBI) on 6 July 2022, issued a press release on ‘Liberalisation of Forex Flows (Revised)' (Press Release) and announced the following measures, inter alia, to augment the foreign exchange flows in India and to expand and diversify the source of forex funding:

  • exemption for investments by foreign portfolio investors (FPI) in government securities and corporate debt from short-term investment limits;
  • exemption to FPI's to invest in commercial papers and non-convertible debentures with an original maturity of up to one year;
  • permission to AD Category I banks (AD Banks) to utilise funds raised from overseas foreign currency borrowings (OFCB) for onward lending in foreign currency India, subject to the end-use prescriptions stipulated in the RBI's ‘Master Direction – External Commercial Borrowings, Trade Credits and Structured Obligations'

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