In order to safeguard its foreign exchange reserves in the face of rising global energy prices associated with the Iranian crisis, India is contemplating a number of emergency measures, including potential bans on non-essential imports like gold and electronics.
Officials from the Reserve Bank of India, the Finance Ministry, and the Prime Minister’s Office reportedly discussed ways to control the growing current account deficit and lessen pressure on the currency.
Increases in fuel prices and stricter restrictions on imports deemed unnecessary are two of the suggestions being explored. According to reports, authorities are worried about the growing foreign cash outflow brought on by rising import prices for crude oil and interruptions in energy supply via the Strait of Hormuz.
The rupee has significantly weakened this year in India, the third-largest oil importer in the world, and its foreign exchange reserves have dropped to about $690.7 billion.
Recently, Prime Minister Narendra Modi asked people to avoid needless gold purchases, use public transportation, minimize trips abroad, and save gasoline.
In an effort to stabilize the foreign exchange market, the RBI is allegedly considering policies pertaining to currency hedging and quicker repatriation of export profits.
Source – NDTV Profit
