India’s push to attract overseas capital has brought in more than $40 billion since June, boosting the RBI’s foreign-currency buffers as policymakers seek to stabilize the rupee amid rising crude prices.
Figures released by the Reserve Bank of India on Saturday showed the amount mobilized through foreign currency non-resident, or FCNR(B), deposits at $36.72 billion as of July 31. That, along with inflows through Overseas Foreign Currency Borrowings and External Commercial Borrowings takes the total to about $41 billion.
India’s central bank sold about $7 billion to defend the rupee on July 24, in what was one of its largest direct interventions in months. The move came as escalating Middle East tensions briefly pushed crude above $100 a barrel, adding pressure on the currency, though oil has since eased to about $90.
In an interview with The Hindu BusinessLine this week, RBI Governor Sanjay Malhotra sought to reassure investors about the rupee, saying the recent weakness reflected geopolitical tensions, dollar strength and broader emerging-market volatility rather than any deterioration in India’s economic fundamentals.
Banks are offering interest rates of as much as 7.75% on five-year Foreign Currency Non-Resident bank deposits, and are also allowing customers to borrow against these deposits.
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