By Admin 
RBI News: Reserve Bank of India i.e. RBI has started a new facility, through which government financial institutions can now get some relief. This new facility is Concessional Forex Swap, with the help of which now it will be easier and cheaper for government financial institutions to take loans from abroad than before. Rating agency S&P Global Ratings has told about this through its report on Thursday.
Facility started last month
In fact, to attract foreign capital to India, RBI had started a special forex swap facility last month. Under this, if public sector (PSU) companies raise External Commercial Borrowings (ECB) from abroad till September 30, then RBI will provide them the facility of only 1.5% annual premium on Dollar Rupee Swap for a period of 3 to 5 years.
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Talking about this, S&P Ratings Agency analyst Geeta Chugh told Money Control that encouraging government financial institutions to take loans from abroad will bring foreign currency into India. This will strengthen the country’s foreign exchange reserves, support the rupee and this capital will further reach various sectors and boost the economy.
What is written in the report?
According to the S&P report, the biggest advantage of this facility is that it eliminates the risk of foreign currency fluctuations at a very low cost. This means that government financial institutions will be able to take cheap loans from abroad without taking much risk. This will reduce their funding costs and they will come forward to raise more foreign loans.
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