RBI caps outstanding ECBs at 6.5% of GDP

The Reserve Bank of India (RBI) on Thursday has announced a cap for funds raised via external commercial borrowing (ECB) at 6.5% of the country’s GDP. Based on GDP figures for March 31, 2018, ‘the soft limit works out to $160 billion,’ the central bank said in a statement. Outstanding stock “It has been decided, in consultation with the Government of India, to have a rule-based dynamic limit for outstanding stock of external commercial borrowings (ECB) at 6.5% of GDP at current market prices,” the RBI said. The outstanding stock of ECB as on September 30, 2018 was $126.29 billion. ECBs refer to commercial loans in the form of bank loans, securitised instruments buyers’ credit, suppliers’ credit availed of from non-resident lenders with a minimum average maturity of three years.

Source  :  https://www.thehindu.com/todays-paper/tp-business/rbi-caps-outstanding-ecbs-at-65-of-gdp/article25793567.ece

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