RBI Increases Forex Remittance Limit To $250,000Year As Reserves Swell
Buying a house overseas, which used to be the preserve of the super rich, has now become a lot easier for wealthy Indians with the Reserve Bank of India doubling the foreign exchange remittance limit to $250,000 per individual per year. In other words, a family of four can remit $1 million (equivalent of Rs 6.2 crore) every year to purchase assets overseas.With this move, the rupee has become almost fully convertible for most Indians. The funds remitted overseas can be used for almost any activity barring a few such as speculation in exchanges, funding terror groups or for remittances to Bhutan, Nepal, Mauritius and Pakistan.
According to Bank of India chairperson V R Iyer, the increase in the liberalized remittance scheme to $2.5 lakh reflects the confidence of the regulator in consistency in foreign inflows.
RBI governor Raghuram Rajan said on Tuesday the foreign currency remittance limit was relaxed following a review of the external sector outlook and as a further exer cise in macro prudential management. The central bank also said that it will ask the government to subsume under this limit various remit tances that an individual is allowed under the Foreign Exchange Management Act, which include donations, gift remittances and exchange facilities for those seeking employment overseas and for maintenance of close relatives abroad. Until now, this facility was in addition to remittance limits already available for private travel, business travel, studies, medical treatment, etc as described in Schedule III of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
An improvement in the country’s foreign exchange re serves has emboldened the RBI to increase the limit. Announcing his policy , Rajan said the following the drop in oil prices the current account deficit has been comfortably financed by net capital inflows, mainly in the form of buoyant portfolio flows and supported by foreign direct investment inflows and external commercial borrowings.
“Accordingly, there was accretion to India’s foreign exchange reserves to the tune of $6.8 billion in Q3,” said Rajan. The sensex fell 122 points on Tuesday to close at 29,000 because of RBI’s decision to maintain status quo on rates and a sell-off in PSu banks due to worsening asset quality. FII selling added to the slide, dealers said.
The day’s session started on a better note with the index opening about 100 points higher. After the RBI said that it was keeping the key policy rates unchanged due to lack of data since its last rate cut, the index started giving up gains and at one point was down over 200 points.
In volatile trades, finally the index closed 0.4% lower with banking and financial services sector stocks among the top laggards.
While FIIs were net sellers in the stock market, in the debt segment they got more freedom to invest in the government securities market. In its policy, RBI allowed foreign investors to plough back their interest earnings from gilts into the same instrument, in effect increasing their exposure limit in government securities.
With the current FII gilt limit at $30 billion, at the current gilt yield, foreign investors can invest an additional $2.5 billion in gilts next year, bond dealers pointed out. This will also help in government’s debt auction by channelizing more funds into the gilt market, they said. So NRI can try property in Jaypee Greens on Noida Expressway at Jaypee Wish Town project.
source: timesofindia
According to Bank of India chairperson V R Iyer, the increase in the liberalized remittance scheme to $2.5 lakh reflects the confidence of the regulator in consistency in foreign inflows.
RBI governor Raghuram Rajan said on Tuesday the foreign currency remittance limit was relaxed following a review of the external sector outlook and as a further exer cise in macro prudential management. The central bank also said that it will ask the government to subsume under this limit various remit tances that an individual is allowed under the Foreign Exchange Management Act, which include donations, gift remittances and exchange facilities for those seeking employment overseas and for maintenance of close relatives abroad. Until now, this facility was in addition to remittance limits already available for private travel, business travel, studies, medical treatment, etc as described in Schedule III of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
An improvement in the country’s foreign exchange re serves has emboldened the RBI to increase the limit. Announcing his policy , Rajan said the following the drop in oil prices the current account deficit has been comfortably financed by net capital inflows, mainly in the form of buoyant portfolio flows and supported by foreign direct investment inflows and external commercial borrowings.
“Accordingly, there was accretion to India’s foreign exchange reserves to the tune of $6.8 billion in Q3,” said Rajan. The sensex fell 122 points on Tuesday to close at 29,000 because of RBI’s decision to maintain status quo on rates and a sell-off in PSu banks due to worsening asset quality. FII selling added to the slide, dealers said.
The day’s session started on a better note with the index opening about 100 points higher. After the RBI said that it was keeping the key policy rates unchanged due to lack of data since its last rate cut, the index started giving up gains and at one point was down over 200 points.
In volatile trades, finally the index closed 0.4% lower with banking and financial services sector stocks among the top laggards.
While FIIs were net sellers in the stock market, in the debt segment they got more freedom to invest in the government securities market. In its policy, RBI allowed foreign investors to plough back their interest earnings from gilts into the same instrument, in effect increasing their exposure limit in government securities.
With the current FII gilt limit at $30 billion, at the current gilt yield, foreign investors can invest an additional $2.5 billion in gilts next year, bond dealers pointed out. This will also help in government’s debt auction by channelizing more funds into the gilt market, they said. So NRI can try property in Jaypee Greens on Noida Expressway at Jaypee Wish Town project.
source: timesofindia
0 comments:
Post a Comment