The Reserve Bank of India has announced some new initiatives to control the Indian Rupee decline against the US dollar. It has increased the limit of external commercial borrowing (ECB) to USD 10 billion. As noted in a leading media, the RBI releases noted that 'It has been decided to allow Indian companies in manufacturing and infrastructure sector and having foreign exchange earnings to avail of ECB for repayment of outstanding rupee loans towards capital expenditure and/or fresh rupee capital expenditure under the approval route'.
Also, the RBI has increased the limit of overseas investment in government bonds by USD 5 billion to USD 20 billion. With the increase in the limit by USD 5 billion in g-secs the term of maturity has been decided as three years from the previous five years.