NEWS & ADVICE : SAVINGS ACCOUNTS
RBI might increase NRI deposit rates, control spending to curtail falling Rupee
By Neelima Shankar
Jun 25, 2012
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The monetary regulator RBI and government might take some measures to control the devaluating Rupee. Higher rates on NRI deposits, reduction in spending and increasing flow of foreign investors via issuing a new bond are on card.

The concerns arise due to the 9 year low GDP growth rate at 6.5% accentuated by the consistent inflation, which was 7.55 for the month of May. The Rupee has seen over 25% fall in value in the past year, touching the all time low of 57 on 22 June. There are also concerns due to dismal industrial outputs.

Experts suggest that government and RBI might soon take measures to increase the foreign exchange inflow by introducing a new government bond and increase the interest rates on NRI deposits.

"RBI may increase the interest rate on FCNR (B) deposit further and announce the issuance of bonds for Non-Resident Indians to address the issues in the short-term" said DK Joshi, Chief Economist at CRISIL.

"The steps we have taken...And we will be able to take certain measures to be announced on Monday which will improve market condition," stated Pranab Mukherjee, Union Finance Minister


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