Firstpost
  • Home
  • Video Shows
    Vantage Firstpost America Firstpost Africa First Sports
  • World
    US News
  • Explainers
  • News
    India Opinion Cricket Tech Entertainment Sports Health Photostories
  • Asia Cup 2025
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
Trending:
  • Charlie Kirk shot dead
  • Nepal protests
  • Russia-Poland tension
  • Israeli strikes in Qatar
  • Larry Ellison
  • Apple event
  • Sunjay Kapur inheritance row
fp-logo
Govt moves to arrest rupee depreciation may not drive fund inflows, negative from long-term perspective, says report
Whatsapp Facebook Twitter
Whatsapp Facebook Twitter
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit

Govt moves to arrest rupee depreciation may not drive fund inflows, negative from long-term perspective, says report

Press Trust of India • September 17, 2018, 06:59:54 IST
Whatsapp Facebook Twitter

The government measures will have a sentimental impact on the market and the rupee trajectory “might not see a full reversal of the appreciation move of the last couple of days”, it said.

Advertisement
Subscribe Join Us
Choose
Firstpost on Google
Choose
Firstpost on Google
Govt moves to arrest rupee depreciation may not drive fund inflows, negative from long-term perspective, says report

Mumbai: The government’s rupee depreciation arresting measures announced on Friday may not drive fund inflows and are a negative from a longer term perspective as they increase short term debt, a HDFC Bank report has said.

“Considering that most of the measures aim at increasing short-term external debt or in effect worsen the risk profile of companies (by increasing un-hedged exposure), could actually be considered negative,” the note released Saturday by one of the largest private sector lenders said.

Increase in short-term external commercial borrowings or foreign institutional investor exposure “could lead to further worsening of vulnerability ratios and the global investors might actually take this negatively”, it warned. The measures include permitting manufacturing sector entities to avail ECBs up to $50 million with a minimum maturity of one year versus the earlier period of three years, removing caps on single group exposure for foreign investors, exemption from withholding tax for issuance of masala bond issues and removing restrictions on Indian banks’ market making in masala bonds. [caption id=“attachment_4495585” align=“alignleft” width=“380”] ![Representational image. Reuters.](https://images.firstpost.com/wp-content/uploads/2018/06/rupee-bundles-reuters.jpg) Representational image. Reuters.[/caption] After announcement of the measures, reports had quoted government sources as saying that it will have a $8-10 billion positive impact through forex savings or increased flows. “These measures are better suited when the sentiment in the global market is positive towards emerging markets and, in general, when it is relatively easy for emerging market corporates to raise money abroad,” the note said. It added that demand for masala bonds from offshore investors is generally driven by the stability of the rupee and in an environment where the rupee is under pressure, foreign investor are unlikely to increase portfolio of rupee-denominated assets. On the move to let corporates borrow from abroad, it said a lot would depend on how quickly and easily Indian corporates are able to garner additional short-term debt through ECBs or portfolio investments. The government measures will have a sentimental impact on the market and the rupee trajectory “might not see a full reversal of the appreciation move of the last couple of days”, it said. The report also warned that while we set to achieve near term fixes, any protectionist gestures have to be viewed with some caution by global investors as it gives the impression of a reversal of ‘reforms’. “We see this as potential negative for the currency beyond the very near term,” it said. It also said that there could be additional measures which were supposed to be announced Saturday. It can be noted that there was no announcement Saturday. Meanwhile, foreign brokerage Nomura said that the measures “underwhelm expectations” and also signify policymakers moving from the first line of defence which includes allowing currency depreciation, forex intervention and positive comments, to the second line which include measures to boost capital inflows, cut imports and boost exports. The Japanese firm said it expects more measures going forward.

Tags
Rupee investors Indian currency rupee depreciation ECBs fund inflows portfolio investments Masala bonds
  • Home
  • Business
  • Govt moves to arrest rupee depreciation may not drive fund inflows, negative from long-term perspective, says report
End of Article
Latest News
Find us on YouTube
Subscribe
  • Home
  • Business
  • Govt moves to arrest rupee depreciation may not drive fund inflows, negative from long-term perspective, says report
End of Article

Impact Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai leads India in challan checks, with drivers checking their e-challans over 5 times a month on average. Helmet non-compliance is the most broken rule, accounting for 34.8% of all traffic offences in Chennai. Regular digital challan checks help drivers avoid hefty fines, promote safe driving, and improve insurance premiums.

More Impact Shorts

Top Stories

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Top Shows

Vantage Firstpost America Firstpost Africa First Sports
Enjoying the news?

Get the latest stories delivered straight to your inbox.

Subscribe
Latest News About Firstpost
Most Searched Categories
  • Web Stories
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Tech/Auto
  • Entertainment
  • IPL 2025
NETWORK18 SITES
  • News18
  • Money Control
  • CNBC TV18
  • Forbes India
  • Advertise with us
  • Sitemap
Firstpost Logo

is on YouTube

Subscribe Now

Copyright @ 2024. Firstpost - All Rights Reserved

About Us Contact Us Privacy Policy Cookie Policy Terms Of Use
Home Video Shorts Live TV