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The government and the Reserve Bank of India are set to announce a slew of measures tomorrow to address the sharp rupee depreciation.
Among the measures being discussed are refinancing exporters via foreign currency and an interest rate subvention.
Central bank officials met bankers last week to discuss ways to boost exports.
According to bankers who attended the meeting, the RBI discussed the possibility of refinancing exporters via foreign currency.
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"If there is dollar refinancing, exporters will get cheaper loans as the interest rate will be linked to the Libor and not the base rate," said a senior banker.
On Friday, the rupee fell the most in nine months and closed at 57.16 a dollar. Expectations are high after Finance Minister Pranab Mukherjee said on Saturday some steps would be announced on Monday to improve the market sentiment.
The market wish-list includes a rise in interest rate on some non-resident deposit schemes, the opening of a special window for oil companies to buy dollars and a cut in government spending.
A few also expect a bond issue for non-resident Indians.
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"The measures should aim at increasing dollar supply. There is a need to provide short-term relief to curtail volatility in the foreign exchange market," said D K Joshi, economist at CRISIL.
Upasna Bharadwaj, economist with ING Vysya Bank, said, "The RBI may open a special window for oil companies. There may be more steps to boost capital flows."
Her views were echoed by Brinda Jagirdar, economist with State Bank of India.
"Oil companies may be allowed to buy dollars directly from the RBI," she said.
"Possibly, the interest rate on FCNR (B) deposits will be raised," said a chief economist with a global bank in India.
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He requested anonymity, as his comments otherwise would have to be approved by the bank's compliance department.
Not many seem to be in favour of an NRI bond issue.
"Right now, the macro fundamentals are not right for NRI bonds," said an economist with a Mumbai-based bank.
"A senior executive of a private bank added, "The RBI may indicate that in future there will be an NRI bond issue but I don't think it will be initiated right now."