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Economy Jul 17, 2013

FDI boost: Rupee at one-month high; opens strong at of 59.20/$

The rupee gained modestly on Wednesday as the government eased rules for foreign investment, adding to measures taken by the RBI to suck out rupee liquidity.

The rupee was at 59.19/20 after rising to 59.05 as against 59.31/31 last close.

However, bond yields jumped, adding to Tuesday's large bond price losses. Yield on the most traded 8.33 pct 2026 bond was 10 basis points higher at 8.27 percent.

The government relaxed FDI rules in various industries in a bid to attract capital inflows, help the rupee and boost growth.

Following decisions on FDI limitswere taken at a meeting chaired by Prime Minister ManmohanSingh.

* FDI cap in telecom raised to 100% from 74% up to 49%through automatic route and beyond via FIPB

Reuters

Reuters

* No change in 49 percent FDI limit in civil aviation

* FDI cap in defence production to stay at 26 percent higherinvestment may be considered in state-of-the-art technology
production by CCS.

* 100 percent FDI allowed in single brand retail; 49 percentthrough automatic, 49-100 percent through FIPB

* FDI limit in insurance sector raised to 49 percent frompresent 26 percent, subject to Parliament approval

* FDI up to 49 percent in petroleum refining allowed underautomatic route, from earlier approval route

* In power exchanges 49 percent FDI allowed through automaticroute, from earlier FIPB route.

* Raised FDI in asset reconstruction companies to 100 percentfrom 74 percent; of this up to 49 percent will be under
automatic route

* FDI limit increased in credit information companies to 74percent from 49 percent

* FDI up to 49 percent in stock exchanges, depositoriesallowed under automatic route

* FDI up to 100 percent through automatic route allowed incourier services

* FDI in tea plantation up to 49 percent through automaticroute; 49-100 percent through FIPB route

* No decision taken on FDI cap in airports, media, brownfieldpharma and multi-brand retail.

Agencies


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