India Fights Rupee Drop, Cash Crunch in Coordinated Policy Moves
- Central bank takes measures to ease bank liquidity shortage
- Government announces import tariffs to curb current account
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India upped the ante in its efforts to restore investor confidence, with the central bank taking measures to ease liquidity for lenders a day after the government raised import tariffs to support the battered rupee.
The Reserve Bank of India allowed banks to dip further into statutory liquidity reserves to help them meet their liquidity coverage ratio needs, a step that would boost cash available for lending. On Wednesday, the government raised import taxes on $12 billion of goods as it seeks to narrow the current-account deficit from a five-year high.