India fears the crisis
India puts a lot of effort to stop the decline of the rupee and the outflow of capital. These factors may lead the country to a great crisis of the last two decades. Bank of India eliminate the amount of capital for local businesses that may invest up to 100 per cent of their foreign equity. Previously, the figure was 400 percent. From now on Indian citizens will be able to transfer money abroad, only 75 thousand dollars.
Public employees strive to limit the capital, currency derivatives and curb imports of gold, but that does not stop the fall of the rupee, which has fallen to a record low. India needs to raise capital to finance a record current account deficit of the balance of payments.
Over the past 2 years, the rupee was asleep by 28 percent, and this year the rupee fell by 11 percent.
Bhanu Baweja says that all this does not solve the problem in India, except that stem the flow of $ 5 billion a year. He also says that when the outflow is limited, then people will start talking about the legality of capital controls, but in general it refers only to local citizens but not in any case foreign investors.
Central Bank decided to raise interest rates and restrict banks' access to liquidity through repo auctions, these procedures are done for you to keep the falling currency. In addition, the import duty has been increased gold and silver.
These efforts have so far failed to produce results outflow of capital, also led to a reduction in the current account deficit, which in the past fiscal year rose to 4.8% of GDP, which is a record value.
This year, the government intends to reduce the rate of GDP to 3.7 percent.
