NRI bonds among options to attract dollar inflow: FinMin
Mumbai: Government is considering all the options, including NRI bonds, to improve the inflow of dollars, a senior finance ministry official said Tuesday.
"Raising money from non-resident Indians (NRIs) through a bond sale is on the table, but the government is looking at all the options," the official said.
The official further said the cost to any instrument to raise money needs to be analysed before reaching a conclusion on which option to be adopted.
"Whatever is beneficial as regards to the cost has been done through measures in the past month, while those like NRI bonds, which have a cost attached to it, are being weighed diligently," the official said.
The rupee, which has lost over 12 per cent so far this fiscal, plumbed new lows earlier in the day today hitting 64.13 but recouped most of the losses on reported RBI interventions and closed at 63.25 against the dollar.
Chairman of the country's largest lender State Bank of India, Pratip Chaudhuri, had expressed concern over adopting the NRI bond option saying that they get mired in litigations.
According to market watchers, the other options before the government include going for a sovereign bond and borrowing from the International Monetary Fund.
The Finance Ministry official said the government would exercise the necessary option whenever it feels the need to do so, but only after weighing the pros and cons.
The rupee has lost over 12 per cent this fiscal and has been hitting new lows in recent trading sessions.
The widening current account gap and the increasing lucrativeness of the US market in view of rising employment data there are seen as the primary reasons for the rupee fall.
A satisfactory economic recovery is one the main conditions for the US Fed to taper its USD 85 billion a month stimulus, which has trickled to emerging markets causing asset prices to rise. If tapering happens sooner than expected, there are concerns that funds will be pulled out from assets of emerging markets like India.