Foreign-currency deposits raised from non-resident Indians under a special Reserve Bank of India-supported programme exceeded US$100 billion by the August 31 eligibility deadline, according to Reuters.
The deposits had stood at US$65.4 billion on August 21, indicating that inflows accelerated sharply during the final days of the programme. Participating banks can exchange eligible foreign currency with the RBI for rupees at a concessional rate. This provides banks with lower-cost rupee funding while adding to India’s foreign-exchange resources.
India’s foreign-exchange reserves had already reached a record US$729.3 billion in the week ending August 21. Economists cited by Reuters expect them to rise further as more of the deposits are exchanged through the RBI facility.
The additional reserve buffer has strengthened the central bank’s ability to support the rupee amid rising crude-oil prices, higher US bond yields and broader pressure on emerging-market currencies.
The August 31 deadline applied only to deposits qualifying for the special RBI swap arrangement. It did not suspend or close regular FCNR(B) accounts available to NRIs.
