The Reserve Bank of India (RBI) has asked exporters to convert at least 50 per cent of their
foreign exchange holdings in rupee, a move seen to prop up the battered currency, which hit a
record closing low of 53.83 against the US dollar on Wednesday.
In a new circular related to the Exchange Earner's Foreign Currency (EEFC) account, the central bank directed exporters to concert at least half of their holding in rupee.
"Fifty per cent of the balances in the EEFC accounts should be converted forthwith into rupee balances and credited to the rupee accounts as per the directions of the account holder," the RBI said in the circular.
This process has to be completed within a fortnight. The move is estimated to lead conversion of around $3 billion of foreign currency, especially the US dollar, into Indian rupee.
The
rupee strengthened to 52.95 against a dollar on Thursday after the Reserve Bank's intervention.
The partially convertible rupee fell to a record closing low of 53.83 against the US dollar on Wednesday. The previous closing low was recorded at 53.72 against a dollar on December 14 last year.
"In respect of all future forex earnings, an exchange earner is eligible to retain 50 per cent (as against the previous limit of 100 per cent) in non-interest bearing EEFC accounts. The balance 50 per cent shall be surrendered for conversion to rupee balances," the RBI said.
RBI said the review of the Exchange Earner's Foreign Currency account scheme is intended to enable exchange earners to save on conversion/transaction costs while undertaking forex transactions in future.
"This facility is not intended to enable exchange earners to maintain assets in foreign currency, as India is still not fully convertible on Capital Account," the central bank said.
Special 
