The Reserve Bank of India (RBI) and the government have taken steps to support the rupee, which has been hit by slowing economic growth, worsening government finances and a widening trade deficit.

Rupee

Rupee

The rupee slumped to a record low of 54.30 to the dollar last Thursday, down about a fifth from its year-high in July. It has since pulled back and was trading at 52.70 around midday on Wednesday.

Following is a summary of the measures initiated by the RBI and the government:

MARKET INTERVENTION

The RBI sold dollars and bought rupees in September and October, according to data from the central bank, which does not set an official target for the rupee and only steps in to smooth volatility. Traders said the RBI has intervened multiple times in the FX market over the past month, including on December 15.

OVERSEAS BORROWING BY MICRO LENDERS

December 19: The RBI allowed microfinance institutions to raise up to $10 million during a financial year through external commercial borrowings for permitted end-uses.

DEREGULATION OF INTEREST RATES ON NON-RESIDENT DEPOSITS

December 16: The RBI allowed banks to set interest rates on non-resident external rupee deposits and ordinary non-resident accounts to help attract more capital inflows.

CUTS FX TRADING LIMITS

December 15: Reduced the net overnight open position limit of authorised dealers in the foreign exchange market, lowering the capacity of market participants to take trading positions.

OVERSEAS BORROWING RULES FOR COMPANIES EASED

November 23: Raised the ceiling on interest rates that companies can pay on foreign loans, provided the funds are brought into India immediately.

FOREIGN INVESTMENT LIMITS IN GOVT, CORPORATE DEBT RAISED

November 17: The government increased the ceiling on foreign institutional investment in government and corporate debt by $5 billion each.