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Rediff.com  » Business » How Raghuram Rajan changed rupee's fortunes

How Raghuram Rajan changed rupee's fortunes

August 27, 2014 15:36 IST

On August 28 last year, the rupee hit its historic low of 68.85 a dollar, amid uncertainties over the US Federal Reserve’s tapering of its monthly bond-purchase programme.

The rupee’s woes were compounded by widening of fiscal and current account deficits - both were at record highs.

On September 4, at a time when the rupee was the worst performer among Asian currencies, Raghuram Rajan took charge as RBI’s governor.

A slew of measures that he announced for attracting inflows helped improve sentiment. With these steps, the rupee’s fortunes also turned.

Business Standard looks at the situation a year ago and compares it with now.

Steps taken by RBI

Marginal Standing Facility rate raised over 300 bps above repo rate to 10.5 %

Dollar swap window made available to banks to meet public-sector oil marketing companies’ dollar demand

The amount of forex individuals could take out of the country was capped at to $ 75,000

Twin swap windows helped banks mop up $34 billion

 

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