![]() Indian companies have also been permitted to invest, up to 400% of its net worth of $1 billion, in shares of foreign companies Mutual Funds are permitted to invest in ADRs/GDRs of the Indian companies, rated debt instruments also invest in equity of overseas companies with an overall cap of $1 billion.įurthermore, under the Liberalized Remittance Scheme of $250,000 resident individuals are free to hold and acquire shares, immovable property, or any other asset outside India without prior approval of RBI, enabling them to convert their rupee-denominated assets into foreign currency denominated assets. INR is fully convertible on India’s current account, but not on the capital account except for certain transactions carried out by foreign institutional investors who can fully repatriate their investments. ![]() RBI intervenes in the currency markets only for ensuring there is low volatility in exchange rates and doesn't take a view on the direction of the Indian rupee concerning other currencies. A managed or dirty float is a currency regime for an Indian rupee for the US dollar. This means that though the Indian rupee has a market-determined exchange rate, the Reserve Bank of India (RBI) trades actively in the INR/USD currency market to impact effective exchange rates. ![]() Indian Rupee (INR) trades against US Dollar (USD) under the managed floating exchange rate regime. In this unit, we will discuss a few major currencies that are known internationally: ![]()
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