How can we stop Indian rupee slide?
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How can we stop Indian rupee slide?
Encouraging Indian borrowers to issue rupee-denominated Masala Bonds is a measure of the RBI/government to stop the slide of Indian rupee as it does not put pressure on our currency through borrowing dollars as the bond issue would be rupee denominated. Hence statement 2 is correct.
How does RBI control rupee?
The central bank can also influence the value of rupee by the way of monetary policy. RBI can tweak the repo rate (the rate at which RBI lends to banks) and the liquidity ratio (the portion of money banks are required to invest in government bonds) to control rupee.
How do you stop the slide of domestic currency?
9 things the govt and RBI can do to prevent a rupee slide
- DOLLARS FOR OIL BONDS.
- ASKING EXPORTERS TO BUY RUPEES.
- CURBING NET OPEN POSITION LIMITS FOR BANKS.
- MORAL PERSUASION.
- STAGGER IMPORT PAYMENTS.
- ADDITIONAL FISCAL REFORMS.
- GOVERNMENT BACKED NON-RESIDENT INDIAN BOND.
- SOVEREIGN OVERSEAS BOND.
Why it is called Masala bond?
Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than the local currency. Masala is an Indian word and it means spices. The first Masala bond was issued by the World Bank- backed IFC in November 2014 when it raised 1,000 crore bond to fund infrastructure projects in India.
Which one of the following is not the most likely measure the government RBI takes?
Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee? Explanation: Curbing the imports will help by reducing the Current account deficit and thus the depreciation of rupee.
Can RBI devalued rupee?
Yes, Market! The demand and supply forces in the currency market determine the price of each currency. If the demand for Indian currency is high, Indian rupee will appreciate (for example 1$ = Rs. 40), and if demand is low, it will depreciate (for example, 1$ = Rs.