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Praising the Reserve Bank of India’s (RBI’s) recent measures, Economic Affairs Secretary Ajay Seth has said the measures will increase inflows of overseas funds and help in strengthening the rupee against the US dollar. RBI on Wednesday raised the overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows.

He said RBI measures, including on External Commercial Borrowing (ECB), are transitory and for shorter duration, and would help in boosting the foreign currency inflows into the country. RBI increased the ECB limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion and eased the norms for FPI investments in the debt market.

Seth also expressed hope that the global challenges would subside in the short term. Unveiling the measures, the central bank had said that all capital flows barring portfolio investments remain stable and an adequate level of reserves provides a buffer against external shocks. Among the fresh steps, the cap has been removed on interest rate that lenders can offer on foreign deposits by NRIs. The relaxation will be in force till October.