Global Investors Keen on Rupee-Denominated Assets: RBI

Mumbai: Global investors have shown an appetite for rupee-denominated assets in recent times and this trend needs to be strengthened further by policy nudges, Reserve Bank of India (RBI) Deputy Governor B.P. Kanungo has said.

In his speech at the Forex Association of India Conference in Singapore, the copy of which was uploaded on the Reserve Bank of India (RBI) website on Monday, Kanungo also noted that although the global economic scenario is not very encouraging, there is, as yet, no room for pessimism.

The International Monetary Fund (IMF) continues to revise downward the global growth projections for 2019, although the outlook for 2020 is more positive. According to the multilateral agency, while growth in developed countries remains sluggish, the emerging economies, including China and India, appear to be facing a challenge.

“The policy regime is also oriented to providing adequate instruments of hedging to all resident economic agents who have exposure to a foreign currency as well as all non-residents who have an Indian rupee exposure.

“The onshore markets are fairly deep and liquid but needs further strengthening. There is a wide menu of hedging instruments available and further expansion would be in keeping with understanding of their risk implication,” Kanungo said.

“In recent times, global institutions and investors have shown a healthy appetite for Rupee denominated assets, which while ensuring flow of foreign exchange protects the Indian issuers from exchange risk. This trend needs to be given further policy nudges”, he said. (IANS)

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