The Indian rupee rebounded on Thursday from a record low after the Reserve Bank of India (RBI) said it will provide dollars directly to state oil companies in its latest attempt to shore up the currency.
The steps are the latest in a series of extraordinary measures by the Reserve Bank of India to combat a currency fall of more than 20 percent this year, by far the biggest decline among the Asian currencies tracked by Reuters.
However, analysts said the RBI measures alone would not lead to a sustained recovery unless the government can pass measures that can convince markets of its willingness to tackle India's fiscal and current account deficits and slowing growth.
Following is a set of measures announced by Indian authorities:
DOLLARS FOR STATE OIL REFINERS
The RBI announced late on Wednesday a special window to sell dollars through a designated bank to Indian Oil Corp Ltd , Hindustan Petroleum Corp and Bharat Petroleum Corp.
The move will remove $400 million to $500 million of daily demand from the spot market. Oil is India's largest import item and state refiners are the biggest buyers of dollars in the foreign exchange market.
The government is looking to contain gold imports at 850 tonnes this fiscal year, compared with 950 tonnes last year. Finance Minister P. Chidambaram said this would lower the import bill by $4 billion.
- New Delhi raised the import duty on gold for the third time in eight months to 10 percent from 8 percent.
- It also raised the factory gate duty on gold bars to 9 percent from 7 percent.
- It banned imports of gold coins and medallions.
- All imports of gold now need a licence from the foreign trade office and would have to be brought into a customs-bonded warehouse.
- Unrefined gold will now be included under an existing rule stipulating that 20 percent of all imports must be used for exports, which is usually in the form of jewellery.
The government is also targeting imports of silver, which are a tiny fraction of gold.
- It has raised the import tax on silver to 10 percent from 6 percent.
OIL FROM IRAN
The government is aiming to cut the oil import bill by $1.5 billion this fiscal year. It is also looking for ways to boost oil imports from Iran,