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RBI raises forex ceiling for travel abroad

The Reserve Bank of India, which is sitting on record reserves, doubled the ceiling on foreign exchange that residents can carry on private visits abroad to $10,000.

"As a measure of further liberalisation, it has been decided to double the limit of foreign exchange available to residents for private visits abroad from $5,000 to $10,000 or its equivalent," the Reserve Bank of India said in a statement on Monday.

The central bank already allows resident Indians to carry up to $25,000 while going abroad on business. For a higher amount, they must approach the central bank for approval.

The central bank has been steadily relaxing foreign exchange controls, gradually moving towards making the rupee fully convertible on the capital account.

It is already fully convertible on the current account but is tightly policed.

The central bank, which has reserves of more than $65 billion, recently announced a slew of measures relaxing foreign exchange rules, reflecting its growing confidence about the external sector.

It allowed overseas funds on Friday to hedge their entire foreign currency exposures arising from investments in Indian equities instead of just 15 per cent earlier.

The central bank also allowed Indian banks to invest up to 50 per cent of their equity or $25 million, whichever is higher, in overseas money market or debt instruments -- up from the earlier limit of 25 per cent of their equity or $15 million.

Earlier this month, it allowed Indian residents to deposit foreign currency obtained abroad -- through payments received for services provided, honorariums or gifts and residual travel money -- in domestic current accounts with no ceiling.

In September, it allowed Indian firms to borrow up to $50 million from global sources without government approval and allowed them to prepay foreign loans ahead of schedule.

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