RBI measures a step in right direction but forex inflows still seen limited

RBI announced five measures pertaining to the liberalisation of foreign exchange flows into India

A slew of measures announced by the Reserve Bank of India on Wednesday to attract greater foreign exchange flows may help rein in the current account deficit but to a limited extent, given significant global headwinds.

While the further liberalisation of the foreign exchange market has set the stage to attract more capital into India, currency experts however do not see the steps immediately bringing about a reversal in the rupee’s depreciation, given a broad-based global shift to the safety of the US dollar.
 

“Given the current risk-averse environment and high hedging cost, the impact on USD inflows is likely