India seeks to prop up rupee by boosting capital inflows

India on Tuesday said it was relaxing foreign investment rules in a move to bring in more capital to support the battered rupee.

The government said residents of Gulf nations and all European Union countries can invest directly in stock markets. Individual overseas investors will also be allowed to plow up to $1 billion into the debt market.

The relaxation in overseas investment norms for individual investors is aimed at "enhancing the flow of foreign capital into India," the finance ministry said in a statement.

The move to relax the investment norms comes at a time when the government and the central bank are seeking to arrest the slide in the rupee.

The rupee touched a record low of 56.38 to a dollar last week, mainly due to the withdrawal of billions of rupees in funds by foreign institutional investors. It was trading at 55.67 rupees to the dollar late on Tuesday.

Also, overseas individual investors can now open rupee accounts with Indian banks and keep the money there for unspecified periods, the ministry said.

However, analysts say while such measures may help the currency temporarily, they are not a long-term solution to the rupee's weakness which reflects concern over slowing economic growth and gaping fiscal and trade deficits.

Analysts say the government needs to press ahead with long-delayed reforms such as further opening up the retail and aviation sectors to foreign investment.

Prime Minister Manmohan Singh's second term in office has been tainted by a series of policy U-turns and corruption scandals and his once ambitious reform agenda has stalled amid coalition infighting.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • First China air force drills in 'far offshore' Pacific
    First China air force drills in 'far offshore' Pacific

    China's air force has carried out its first ever military drill over the western Pacific Ocean, state media said, highlighting Beijing's growing military reach. Several aircraft from China's People's Liberation Army (PLA) on Monday flew over the ocean via the Bashi Channel, which runs between Taiwan and the Philippines, the official Xinhua news agency said. "This is the first time that the PLA Air Force conducted such drills in an airspace far offshore from Chinese coastlines," Xinhua cited …

  • Shorter hours for rail lines tomorrow
    Shorter hours for rail lines tomorrow

    The Metro Rail Transit (MRT), Light Rail Transit (LRT) and the Philippine National Railways (PNR) will have shorter hours tomorrow for the replacement of defective railroad tracks during the Holy Week. …

  • Noy increases allowances for cops, soldiers
    Noy increases allowances for cops, soldiers

    President Aquino has signed a joint congressional resolution raising the daily subsistence allowance for both members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP). Presidential spokesman Edwin Lacierda said Aquino signed last March 27 the merged Joint Resolution 2 of the Senate and Joint Resolution 26 of the House of Representatives. Speaking to reporters, Lacierda yesterday said the daily allowances of police officers and soldiers were raised from P90 …

  • Oil firms raise gas prices today
    Oil firms raise gas prices today

    This year’s Holy Week break will be accompanied by an increase in local pump prices after oil companies announced yesterday a P1.10 per liter hike for gasoline and P0.60 per liter for diesel effective today. “Phoenix Petroleum Philippines will increase the prices of gasoline by P1.10 per liter and diesel by P0.60 per liter effective 6 a.m. of March 31, 2015 to reflect the movements in the prices of refined petroleum products in the international market,” said Phoenix Petroleum, an independent …

  • DFA denies dropping Phl claim to Sabah
    DFA denies dropping Phl claim to Sabah

    The Philippines has never offered to drop its Sabah claim in exchange for Malaysia’s support for Manila’s arbitration case against China over the West Philippine Sea issue, the Department of Foreign Affairs (DFA) said yesterday. “In the context of our friendly bilateral relations, our two countries have been for years exchanging ways on how to address the issue of the extended continental shelf (ECS) in the South China Sea,” Foreign Affairs spokesman Charles Jose said in explaining the DFA’s …

  • Pagcor remits record high P5 B to national treasury
    Pagcor remits record high P5 B to national treasury

    The Philippine Amusement and Gaming Corp. (Pagcor) has remitted P5 billion in cash dividends to the National Treasury, fully settling all its arrears incurred in the last several years. Pagcor chairman and chief executive officer Cristino Naguiat Jr. said with this year’s remittance, the state-owned gaming firm has fully settled all remaining arrears in cash dividends that were incurred by the previous administration since 2005. Pagcor’s cash dividends to the National Treasury under its …

  • Maysak moves closer to Phl
    Maysak moves closer to Phl

    The typhoon with international name Maysak slightly accelerated as it moved closer to the Philippines yesterday, threatening to dump rains over eastern Luzon this weekend, the state weather bureau said. Rene Paciente, senior weather forecaster of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), said Maysak was spotted at 2,175 kilometers east of Mindanao as of 1 p.m. yesterday. Paciente said based on their latest forecast, Maysak is likely to affect …

  • Phl gets P2-B climate projects from Germany
    Phl gets P2-B climate projects from Germany

    The Philippines is getting 41 million euros or around P2 billion from the International Climate Initiative (ICI) of Germany that will fund 10 bilateral projects to address the impact of climate change. Climate Change Commission (CCC) vice chairman Lucille Sering yesterday met with Norbert Gorissen – head of the International Climate Finance of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety – to discuss the projects, some of which will be …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options