Financial Times: India Restricts Outward Investment to Bolster Rupee

Financial Times: India Restricts Outward Investment to Bolster Rupee
August 15, 2013
By Victor Mallet

India has unveiled restrictions on capital outflows in new moves to bolster the rupee that were likened by one analyst to “a panic signal” and attacked by another as “desperate Band-Aids”.

Shortly before Manmohan Singh, prime minister, promised a return to high economic growth in a speech to the nation, the Reserve Bank of India cut the maximum outward direct investment by companies and individuals in future deals to a quarter of the old level.

The central bank reduced the limit to 100 per cent of the net worth of the Indian investor from 400 per cent unless special permission is granted. State oil companies were excluded from the new restrictions.

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