The monetary unit of India marked its steepest losses in about four weeks against the world's reserve currency on Wednesday amid confidence importers will strengthen purchases as April drives toward its close, according to Bloomberg.
Exchange data noted foreign funds vended a net amount of $1.2 billion in Indian bonds thus far this month through Tuesday. India's trade deficit grew to $10.5 billion in March after checking in at $8.1 billion during February, official data released earlier this month notes.
"It has, however, come to our notice that some exporter borrowers are using export advances, received on the strength of guarantees issued by Indian banks, for repayment of loans availed of from Indian banks," the central bank stated, according to PTI. "This is a clear violation of our instructions except in cases where banks have received approvals under FEMA and banks are advised to desist from such practices."
The rupee slumped about 0.3 percent against the U.S. dollar, touching its lowest value since March 21 against its rival currency.
The Reserve Bank of India dissuaded worldwide office of Indian banks from issuing credit guarantees with overseas subsidiaries of Indian companies, according to PTI.
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