NEW DELHI, Sept 26: India’s central bank on Tuesday increased the amount local companies and mutual funds can invest overseas in a move towards making it easier to convert the rupee into foreign currency.
The Reserve Bank of India said in a statement that it had acted following consultations with the government and in the light of economic conditions.
The latter include a strong rise in the rupee. Making it easier to buy foreign currency with rupees could help to curtail that rise, which hurts exporters.
Indian companies will now be allowed to invest up to 400 per cent of their net worth in overseas joint ventures and wholly-owned subsidiaries, the statement said.
The ceiling for overseas investments by mutual funds has been increased from $4 to 5 billion, the bank said.India allows rupee convertibility in current account transactions for travel abroad or education purposes.—AFP
