- Indian rupee could plunge to 70 to US dollar soon, says Deutsche BankIndian rupee hits new low against UK pound, breaches Rs 101-levelIndian rupee plunges to historic low of below 64.52 against US dollar, RBI helplessIndian stock market investors chalk up wealth loss of US dollar 100 bn over 4 days
Faced with the sliding Indian rupee, the government is considering allowing unlisted companies to launch public offers in overseas markets and raise funds in foreign currency.
"The proposal to allow unlisted companies to list on overseas stock exchanges through Initial Public Offering (IPO) is being considered," a senior finance ministry official said.
Under the current norms, only those companies that are listed on the domestic stock exchanges are permitted to list on bourses overseas.
The move is expected to help the companies meet their foreign exchange requirements and at the same time ease pressure on the domestic currency, which has been touching new lows over the past couple of months.
"It would also help in reducing pressure on the CAD as such companies will either bring in the foreign exchange or utilise the proceeds to meet their own requirements," the official added.
The proposal will also help companies gain access to other markets at a time when the domestic stock market is witnessing massive sell-offs.
The BSE 30-stock index, Sensex, has lost around 1,500 points in the last four trading sessions amid the weakening of the domestic currency.
The rupee, which has been on a declining trend since June, touched all-time low of 64.49 against the US dollar in the intra-day trade today.
A weak rupee, which can mainly be attributed to widening of the Current Account Deficit (CAD), raises import cost and fuels inflation in addition to putting pressure on other macro economic parameters.
The CAD, which is the difference between the inflow and outflow of foreign exchange, touched a record high of USD 88.2 billion or 4.8 per cent of GDP in 2012-13.
Finance Minister P Chidambaram had last week said that CAD will be contained at USD 70 billion or 3.7 per cent in the current fiscal.