But on the downside, they heighten interest rate risk with larger duration gaps, which vary widely across euro area banks – not least due to differences in the share of fixed-rate mortgages. Banks also tend to incur unrealised losses on their fixed-income portfolios during periods of increasing long-term yields. This exerts a negative effect on the value of their equity.
This will also instil confidence to the investors and encourage investment as well. The Reserve Bank has rationalised and introduced the Import Substitution and Export Finance Facility which all exporters and businesses may access to boost exports and reduce imports. Energy renewable projects also qualify for this facility. $ million is available under this scheme and the current usage is $ million.