RBI eases overseas borrowing norms for dollar-hungry OMCs
Mumbai, Oct 3 : The Reserve Bank India (RBI) on Wednesday relaxed overseas borrowing norms for state-run Oil Marketing Companies (OMCs) as rupee continues to slide to new lows for more than a month now.
The RBI relaxed the norm that requires raising External Commercial Borrowings (ECBs) for working capital purposes from direct and indirect equity holders or from a group company with a minimum average maturity of five years.
Public sector OMCs, which require huge amount of foreign currency to import crude oil, can now raise ECBs for working capital purposes with a minimum average maturity of three to five years from all lenders under the automatic route.
"It has been decided, in consultation with the government of India, to liberalise the said provision and permit public sector OMCs to raise ECB for working capital purposes with minimum average maturity period of 3/5 years from all recognized lenders under the automatic route," the RBI said in a notification.
Further, the individual limit of $750 million or equivalent and mandatory hedging requirements as per the ECB framework have also been waived and the overall ceiling for such ECBs has been kept at $10 billion equivalent, with immediate effect.
While the OMCs have been encouraged to raise some of their dollar requirements from abroad, the central bank has asked the OMCs to have a Board-approved forex mark to market procedure and prudent risk management policy for such ECBs.
The notification comes on a day when rupee touched a fresh low and closed at its all-time low of Rs 73.34 per US dollar after Brent crude oil price went over $84 a barrel.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Trump’s fresh threat to bomb Iran amid reports of deal to end war
Washington (PTI): US President Donald Trump on Wednesday threatened Iran with more bombing if it doesn't reopen the Strait of Hormuz, amid a report that the warring sides were nearing an agreement to end the war.
US media outlet Axios reported, quoting US officials and two other sources, that the US and Iran were getting close to a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations.
The US expects Iranian responses on several key points over the next 48 hours, Axios reported, adding that nothing has been agreed yet. This was the closest the parties had been to an agreement since the war began.
"Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran," Trump said in a post on Truth Social.
"If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before," Trump said.
According to Axios, the deal would involve Iran committing to a moratorium on nuclear enrichment, the US agreeing to lift its sanctions and release billions in frozen Iranian funds, and both sides lifting restrictions around transit through the Strait of Hormuz.
It said many of the terms laid out in the memo would be contingent on a final agreement being reached, leaving the possibility of renewed war or an extended limbo in which the hot war has stopped, but nothing is truly resolved.
