The Reserve Bank of India (RBI) on Thursday asked all foreign exchange earners, including exporters, to convert 50 percent of their foreign exchange holdings into Indian rupee, in a bid to arrest the recent slide in the currency. In a statement, the central bank said "50 percent of the balances in the Exchange Earner's Foreign Currency (EEFC) accounts should be converted forthwith into rupee balances and credited to the rupee accounts as per the directions of the account holder."
This process may be completed within a fortnight, RBI said. For all future forex earnings, an exchange earner is eligible to retain 50 percent in non-interest bearing EEFC accounts as against the previous limit of 100 percent, the bank said. The balance 50 percent shall be surrendered for conversion to rupee balances.
The EEFC account holders will now be permitted to access the forex market for purchasing foreign exchange only after fully utilizing the available balances in the EEFC accounts.
Separately, RBI said it has decided to fix the intra-day open position limit at five times the net overnight open position limit. The Indian rupee rose after the announcement of the new rules.
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