Please enable JavaScript.
Coggle requires JavaScript to display documents.
CURRENT ACCOUNT DEFICIT (Steps taken by Government to improve Current…
CURRENT ACCOUNT DEFICIT
Background
CAD is projected at 2.4% of GDP in 2018-19, up from 1.8% in 2017-18
deterioration of trade deficit
Rise in crude prices
decline in the growth of merchandize exports
Steps taken by Government to improve Current Account Deficit
Steps taken to attract dollars
Enabling more companies to raise External Commercial Borrowings (ECBs).
Removal of exposure limit of 20% of FPI’s corporate bond portfolio to a single corporate group
Masala bonds issued in 2018-19 exempt from withholding tax
Recapitalization of EXIM Bank
increase in the bank’s authorised capital from Rs. 10,000 crore to Rs. 20,000 crore
will enable bank to augment capital adequacy and support Indian exports with enhanced ability
Swap Facility provided
$5- billion dollar-rupee swap facility for the banks to facilitate permanent liquidity support
Benefits of the Swap Facility
Reduce interest by banks
Increase RBI’s Foreign Exchange Reserves
Control appreciation of Rupee
Reduce financial stress on NBFCs