Export and Import Bank (Exim) said on Sunday that the present scenario arising out of the COVID-19 outbreak is not suitable to raise funds and other resources from overseas markets.
A credit line of USD 2 billion, the investor had requested the reserve bank of India (RBI). “The mandate for Exim Bank is to lift funds and alternative resources from overseas markets primarily for disbursement under concessional finance program on behalf of the govt.,” an official said.
The market now is not appropriate for raising funds abroad because of Covid-19, the official said.
“We requested for USD 2 billion credit line from rbi, equal to around Rs 15,000 crore, that the apex bank has agreed to,” he told PTI.
Rs 15,000-crore line of credit to the investor was declared by the reserve bank on Friday.
“How and in what form this money will come is not yet clear. Raising resources from overseas markets is now a challenge. There is a regular need for disbursements in foreign currency,” he said.
Exim Bank raises funds in multiple currencies like USD, Japanese Yen, South African Rand, Euro, and Singapore dollar, and then currencies are then swapped into USD, according to him.
“Nearly 70 percent of our business is in USD. we’ve got a large demand of bucks,” he said.
Speaking regarding the outlook for export within the current fiscal, he said that it’s undoubtedly going to fall.
“We don’t need to invest the extent of the fall. Because of the lockdown, demand has contracted across sectors and there’ll be a decline in exports also,” the official said. The market sentiment is down at the instant, and there has been no specific request for a line of credit from any quarter.
“We are now trying to deal with companies which have already made inroads in Africa, Bangladesh, and Sri Lanka,” he added.