7 Steps Indian Policy Makers Can Take To Prevent A Rupee Drop

 4. To Provide Oil Bonds 

Than providing dollars and or other non- rupee currencies; RBI can hold auctions for oil companies to buy bonds. Since the Indian government is giving direct cash subsidy to the oil companies, the outstanding amount of their bonds is less. However, the government no longer issue bonds.

 5. Review limits for foreign investment 

There are some investment sectors where the government could evaluate the limits for foreign investment. Sectors like defence, or revive pension and insurance reforms can be reviewed, but getting the green nod from the parliament it is the biggest challenge.

6. Sovereign Bonds to NRIs

The Indian government can also provide sovereign bonds to non-resident Indians (NRIs) through the State Bank of India. This step may protect the rupee decline but the fact is, this measure might raise India’s debt bar and interest liability.

7. Sovereign Overseas Bonds

By issuing sovereign bonds may help raise dollars from overseas investors, but RBI does not want to take the foreign exchange risks during repayment.

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