Mumbai: The Reserve Bank of India doubled the annual overseas investment ceiling for individuals to USD 2,50,000. Meanwhile, foreign exchange reserves are touching record levels.
In view of the worsening current account deficit and a volatile rupee, the RBI had in August 2013 reduced the ceiling from USD 200,000 to USD 75,000 per person in a year under the LRS. Consequently, with improvement in forex situation, it was raised to USD 1,25,000 in June 2014.
The RBI said in its Bi-Monthly Monetary Policy Statement, “On a review of the external sector outlook and as a further exercise in macro-prudential management, it has been decided to enhance the limit under the Liberalised Remittance Scheme (LRS) to USD 2,50,000 per person per year.” The LRS allows residents to acquire and hold shares, debt instruments or other assets outside India without prior approval of the RBI.
In mid-January, India’s foreign exchange reserves touched a new life-time high at USD 322.135 billion, driven by higher foreign fund inflows and lower forex outgo on the back of a massive fall in global crude prices.
