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RBI Demands Exporters Convert 50% of Forex to Rupee
May 10, 2012 7:43 AM
By Dilipp S Nag
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RAPAPORT... The Reserve Bank of India (RBI) directed exporters to convert 50 percent of their foreign currency held in Exchange Earner's Foreign Currency (EEFC) account into rupee within a fortnight. The central bank's move is aimed at curbing the slide in the Indian rupee, which hit a record closing low of 53.82 against the dollar on Wednesday. (Read the PDF circular from RBI)
Exporters were permitted to retain 100 percent of their forex earnings with banks in an EEFC account. RBI stated that in respect of all future forex earnings, an exchange earner is eligible to retain 50 percent as against the previous limit of 100 percent in non-interest-bearing EEFC accounts. The balance 50 percent shall be surrendered for conversion into rupee balances, it added.
The central bank also said that exporters will be permitted to access the forex market for purchasing foreign exchange only after fully utilizing the available balances in their EEFC accounts. These provisions also apply to a Resident Foreign Currency Account (RFC) and a Diamond Dollar Account (DDA), it noted.
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Tags:
Central Bank, DDA, diamond, Diamond Dollar Account, Dilipp S Nag, Dollar, Exporters, India, Rapaport, RBI, Reserve Bank of India, Rupee
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