Investors will not have to pay withholding tax, a key levy on the rupee-denominated masala bonds this financial year, the government said in a notification Monday.

The move is aimed at obtaining dollar inflows into the country at a time when a drastic rupee route against the dollar threatens to cloud the country’s economic prospect.

“It has been decided that interest payable by an Indian company or a business trust to a non-resident, including a foreign company, in respect of rupee denominated bond during the period from 17th September, this year to 31st March next year, 2019 shall be exempt from tax,” said the Central Board of Direct Taxes (CBDT).

Currently, the tax levy, a key drag for investors, is at 5%. It was supposed to be reviewed at the beginning of the July in 2020.

Rupee-denominated or masala bonds are sold outside India but in rupee terms. Global investors bear the currency risk. Although investors are supposed to pay for the levy but issuing companies normally take care of the cost through a financial engineering that is to build the same in offering the coupon.

With the latest relaxtion in masala bonds, it will help getting more dollars flows aiding Domestic Borrowers- of which those NBFCs are a key component,” said Ajay Marwaha, director for investments at Sun Global Investments in London. “It is important that any relaxation be extended to the NBFC sector, a critical channel for mid market growth in India.

Last Friday, Finance Minister Arun Jaitly announced five-pronged measure to calm the sliding rupee while aiming to control the current account deficit or excess of overseas revenues over expenditure.

Low cost foreign borrowings through off-shore rupee denominated bond have been further incentivised to increase the foreign exchange inflow, CBDT said.