Mumbai - The Reserve Bank of India (RBI), India's central bank, has asked exporters to convert 50 per cent of their foreign exchange holdings into rupees within 14 days in order to boost the Indian currency. In 2011, the Indian rupee was one of ten worst performing Asian currencies.
Since August of last year, the rupee dropped 21 per cent against the US dollar. It reached its lowest point on 15 December at 54.3 rupees per US dollar.
This morning, following the RBI's move, it stood at 53.83.
Exporters now have to use their entire foreign exchange holdings before buying any more.
This "will reduce demand for foreign currencies" and help shore up the rupee as a result, said Dariusz Kowalczyk of Credit Agricole-CIB.