Cap on Capital Inflow

I would not go into the details. But the news is, as I had predicted, that government has finally answered the prayers of exporters. The newly introduced cap of $20 million on external commercial borrowing (ECB) is a step to modulate capital inflow. This combined with monetary contraction will tend to curb the rupee appreciation, to the relief of exporters.

But it is hightime for our exporters to stop being dependent on currency margins. Instead, they should improve on efficiency, quality and diversity of market (to guard themselves from depreciation of dollar), keeping FM's passion for double digit growth in mind.