The Reserve Bank has been guided by the objective of developing deep and liquid on-shore financial markets that act as a price setter of the Rupee globally. The focus of policy efforts has been to align incentives for non-residents to gradually move to the domestic market while at the same time improving market liquidity to promote hedging activity on-shore. With this objective, RBI had announced, in the Statement on Developmental and Regulatory Policies dated February 7, 2019, the setting up of a Task Force on Offshore Rupee Markets. The Task Force shall examine the issues relating to the offshore Rupee markets in depth and recommend appropriate policy measures that also factor in the requirement of ensuring the stability of the external value of the Rupee.
Accordingly, RBI has constituted the Task Force on Offshore Rupee Markets. Usha Thorat, former Deputy Governor, Reserve Bank of India would be the Chairperson. The terms of reference of the task force include assessing the causes behind the development of the offshore Rupee market, studying the effects of the offshore markets on the Rupee exchange rate and market liquidity in the domestic market and recommending measures to address concerns, if any. It is also expected to propose measures to generate incentives for non-residents to access the domestic market. The Task Force shall submit its report by the end of June 2019. The Task Force may, if considered necessary, invite other experts in the field to share their inputs.
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