INSUBCONTINENT EXCLUSIVE:
The government measures will have a sentimental impact on the market, said report.The government's rupee depreciation arresting measures
announced Friday may not drive fund inflows and are a negative from a longer term perspective as they increase short term debt, a HDFC Bank
"Considering that most of the measures aim at increasing short-term external debt or in effect worsen the risk profile of companies (by
increasing un-hedged exposure),could actually be considered negative," the note released Saturday by one of the largest private sector
permitting manufacturing sector entities to avail ECBs up to USD 50 million with a minimum maturity of one year versus the earlier period of
three years,removing caps on single group exposure for foreign investors,exemption from withholding tax for issuance of masala bond issues
measures are better suited when the sentiment in the global market is positive towards emerging markets and,in general, when it is
investors is generally driven by the stability of the rupee and in an environment where the rupee is under pressure,foreign investor are
government measures will have a sentimental impact on the market and the rupee trajectory "might not see a full reversal of the appreciation
move of the last couple of days", it said
The report also warned that while we set to achieve near term fixes, any protectionist gestures have to be viewed with some caution by
It also said that there could be additional measures which were supposed to be announced yesterday
expectations" and also signify policymakers moving from the first line of defence which includes allowing currency depreciation, forex
intervention and positive comments, to the second line which include measures to boost capital inflows, cut imports and boost exports
TheIndianSubcontinent staff and is published from a syndicated feed.)
