NEW DELHI: The government has decided to extend the foreign trade policy by six months, until April 1. It did this because of the Russia-Ukraine crisis and the fact that central banks around the world are tightening their money supply.

The Foreign Trade Policy 2015–2020, which was supposed to be in effect until September 30, has now been extended to April 1. This was announced by the Commerce Department. Since Wednesday, when the US Federal Open Market Committee raised interest rates by 75 basis points to 3.00-3.25%, the rupee has been very unstable.

The foreign trade policy was supposed to end on March 31, 2020, but it was first extended for a year, until March 31, 2021, so that COVID-19 wouldn't spread. Since then, this is the fourth time that the trade policy has been extended.

Investors are getting more and more worried about a recession in the US and Europe, which are two of the world's largest economies. As bears took over, foreign investors have started to pull their money out of stocks. Along with the outflow of foreign funds, geopolitical tension in Ukraine, inflationary pressures, and tighter monetary policy have caused the rupee to lose more value against the US dollar. The dollar is at its highest level in 22 years, while the rupee hit a new all-time low of 81.6 rupees per dollar.

Earlier, the government had moved the deadline for the Foreign Trade Policy 2015-20 to September 30, 2022.

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