Reining in CAD and Ruppee Flashcards
What is the full form of CAD ?
Current Account Deficit
What did the government decide to do ?
Attract dollars and address financial market volitility
What are Masala bonds ?
Debt securities
Which currency dominates Masala bonds ?
Ruppee
Where are Masala bonds issued ?
Outside India
Who issues Masala bonds ?
Indian companies
What are some of the reasons for fall in value of Ruppee ?
- Withdrawal of FPI
- Decline in Indian Export Demand
- Rising crude prices
- Fear of trade war
- Higher US Interest rates
What is external commercial borrowings ?
Borrowing money from non-resident lenders and investing it in India’s commercial activities
What is with holding tax ?
The amount employer withholds from employees’ wages and pays to the government
What are some of the steps taken to attract dollars ?
- Enable Companies to raise ECB
2. Easing of curbs on Marketing, underwriting of Masala bonds
What is the minimum maturity period of ECBs for manufacturing forms now ?
50 million dollars, 1 year as opposed to 3 years
Are Masala Bonds issued in 2018-19 exempt from withholding tax ?
Yes
What was done to the exposure limit of 20% of FPI’s corporate bond portfolio to single corporate group ?
Removed
What is an emergency measure taken until domestic inflation is curtailed and exports are boosted ?
NRI bonds
What has the government cut imports of to boost exports ?
Non essential items - steel, furniture, etc
