IV. Monetary Policy In An Open Economy (Annexure) - RBI - Reserve Bank of India
IV. Monetary Policy In An Open Economy (Annexure)
Annex IV.1 Management of Capital Inflows: Restrictions and Prudential Requirements –Country Experiences Indonesia (1990)
Malaysia (1989)
Philippines (1992)
Thailand (1988)
Thailand (2003)
Taiwan
Eastern Europe and Latin America Chile (1990)
Colombia (1991)
Czech Republic (1992)
Mexico (1990)
Brazil (1992)
Note : Dates in brackets refer to the first year of the surge in inflows. Sources : 1. Reinhart and Smith (1998). Annex IV.2 Monetary Measures for Exchange Rate Management: India 1995-96 October 30, 1995 - Effective October 31, 1995 with a view to discouraging excessive use of bank credit to finance imports, outstandings under the import credit limit were subject to a 15 per cent interest rate surcharge. November 29, 1995 - With a view to making the Foreign Currency NonResident Accounts (Banks)[FCNR(B)] Scheme more attractive to banks and to enable them to market FCNR(B) deposits more competitively, the increase in liabilities under the FCNR(B) Scheme over the level outstanding as on November 24, 1995 was exempted from CRR, effective fortnight beginning November 25, 1995. December 6, 1995 - With a view to enabling banks to better balance the cost of FCNR (B) deposits and the return on the deployment of their funds, average CRR on the outstanding liabilities under the FCNR (B) scheme as on November 24, 1995 was reduced from 14.5 per cent to 7.5 per cent effective fortnight beginning December 9, 1995. February 7, 1996 - With a view to removing the distortion in the effective interest rates on post shipment expor t credit denominated in foreign currency (PSCFC) facility being significantly lower than under foreign currency post-shipment credit, the PSCFC was terminated effective February 8, 1996. - Effective February 8, 1996 the interest rate on Post-shipment Export Rupee Credit for over 90 days and up to 180 days was deregulated. - Effective February 8, 1996 outstandings under the import credit limit were subject to a 25 per cent interest rate surcharge. 1997-98 December 2, 1997 - The CRR on net demand and time liabilities (NDTL) of scheduled commercial banks was raised by 0.5 percentage points to 10.0 per cent, effective fortnight beginning December 6, 1997. - The incremental CRR of 10.0 per cent on NRE and NRNR deposit schemes was removed effective fortnight beginning December 6, 1997. December 17, 1997 - Effective December 18, 1997, banks were to charge a minimum interest rate of 20.0 per cent per annum, on overdue export bills from the date of advance. Earlier banks were free to charge any rate of interest on overdue export bills which were not realised within the due date. - An interest rate surcharge of 15.0 per cent of the lending rate on bank credit for imports was introduced, effective December 18, 1997. December 31, 1997 - Effective January 1, 1998, the interest rate on post shipment rupee export credit beyond 90 days and up to six months was reduced from 15.0 per cent to 13.0 per cent. January 16, 1998 - The Bank Rate was raised by two percentage points to 11.0 per cent per annum, effective January 17, 1998. - The repo rate was raised by 2 percentage points to 9 per cent, effective January 17, 1998. - CRR was raised by 0.5 percentage point to 10.5 per cent of NDTL of scheduled commercial banks effective fortnight beginning January 17, 1998. - Effective fortnight beginning January 17, 1998, all scheduled commercial banks were to be provided export credit refinance to the extent of 50 per cent of the increase in outstanding export credit eligible for refinance (as against 100 per cent earlier) over the level of such credit as on February 16, 1996. - Effective January 17, 1998, the interest rate surcharge on bank credit for imports (excluding export related imports) was raised from 15 per cent of the lending rate to 30 per cent. 1998-99 June 11, 1998 - To enable exporters to avail of export credit in foreign currency more effectively at internationally competitive rates, banks were to charge a spread of not more than 1.5 percentage points over LIBOR. June 13, 1998 - The Reserve Bank reduced the fixed repo rate by one percentage point to 5 per cent, effective June 15, 1998. August 6, 1998 - A temporary revision in the interest rates charged up to March 31, 1999 by the scheduled commercial banks on pre-shipment and post-shipment rupee export credit was effected. It was decided that scheduled commercial banks would be provided export credit refinance at 2.0 percentage points below the Bank Rate (i.e., 7.0 per cent per annum). August 20, 1998 - As a temporary measure, in order to absorb excess liquidity, the CRR to be maintained by the scheduled commercial banks against their NDTL (excluding liabilities subject to zero CRR prescription) was increased from 10 per cent to 11 per cent, effective fortnight beginning August 29, 1998. August 21, 1998 - The fixed repo rate was increased by three percentage points to 8 per cent from 5 per cent. 2000-01 May 25, 2000 - An interest rate surcharge of 50 per cent of the lending rate on import finance was imposed with effect from May 26, 2000, as a temporary measure on all non-essential imports. -Banks were advised to charge interest at 25 per cent per annum (minimum) from the date the bills fall due for payment in respect for overdue export bills in order to discourage any delay in realisation of export proceeds. July 21, 2000 - The Bank Rate was increased by 1 percentage point from 7 per cent to 8 per cent effective July 21, 2000. - CRR was increased by 0.5 percentage point from 8 per cent to 8.5 per cent in two stages by 0.25 percentage point each effective from fortnights beginning July 29, 2000 and August 12, 2000, respectively. - The limits available to banks for refinance facilities including the collateralized lending facility (CLF) were reduced temporarily to the extent of 50 per cent of the eligible limits under two equal stages effective from July 29, 2000 and August 12, 2000.
|