The Reserve Bank of India (RBI) today further tightened the interest rate on repatriable non-resident external rupee (NRE) deposits. The move will put rupee (NRE) and dollar (FCNR-B) deposits on a par and kill any arbitrage opportunity.
The RBI said the interest rate on NRE deposits could not exceed 100 basis points above the London Inter-Bank Offered Rate (Libor)/SWAP rates for the US dollar of corresponding maturity.
