Archive · 3 Sep 2026
Rupee Reaches Two-Month High as FCNR-B Inflows Surge
The Indian rupee became stronger against the US dollar on Thursday.
It opened at Rs 94.30 for one dollar and later closed at Rs 94.48.
One report described the opening move as a 67-paise gain, while the closing gain was 49 paise.
Banks attracted a very large amount of foreign currency through FCNR(B) deposits.
These deposits brought in $127.23 billion during a facility that ran from June 8 to August 31, 2026.
Other foreign borrowings brought total reported inflows to $136.38 billion.
Experts said this could increase India’s foreign-exchange reserves and help protect the rupee.
They also warned that oil prices, global bond yields, geopolitical tensions, and future deposit repayments could create pressure later.
The rupee opened 67 paise stronger at Rs 94.30 per US dollar on Thursday, September 3, 2026.
It closed at Rs 94.48, gaining 49 paise from Wednesday’s close of Rs 94.97, according to one report.
Banks mobilised $127.23 billion through FCNR(B) deposits during the June 8-August 31 facility.
Total inflows, including external commercial borrowings and overseas foreign-currency borrowings, reached $136.38 billion.
Analysts cited stronger reserves and a weaker dollar as support, while oil prices, bond yields, and future deposit maturities remained risks.
- Who
- The Indian rupee, the Reserve Bank of India, Indian banks, and analysts from HDFC Securities, DBS Bank, and Bank of Baroda.
- What
- The rupee strengthened and reached a roughly two- to two-and-a-half-month high after substantial FCNR(B) deposit inflows.
- When
- Thursday, September 3, 2026; the FCNR(B) facility operated from June 8 through August 31, 2026.
- Where
- Mumbai and India’s foreign-exchange market.
- Why
- Large foreign-currency inflows improved sentiment and strengthened India’s external foreign-exchange buffers.
Benefits and Support
Risks and Future Pressure
Impact on reserves
Benefits and Support
Analysts said the inflows could push India’s foreign-exchange reserves above $750 billion and provide greater capacity to defend the rupee.
Risks and Future Pressure
Analysts cautioned that three-year and five-year deposit maturities could later increase dollar demand and pressure the foreign-exchange market.
Currency outlook
Benefits and Support
The strong inflows, a weaker US dollar, and steady oil prices supported the rupee and improved external buffers.
Risks and Future Pressure
Brent crude near $95 per barrel, elevated global bond yields, geopolitical tensions, and possible future repayments could weigh on the currency.
FCNR(B) demand
Benefits and Support
Higher rates of about 6-7% on some three- to five-year FCNR(B) deposits made them more attractive to non-resident Indians, according to Bank of Baroda’s economist.
Risks and Future Pressure
The resulting liabilities will mature in concentrated periods, requiring reserves or other measures to manage repayment-related dollar demand.
- Opening exchange rate
- Rs 94.30 per US dollar
- Closing exchange rate
- Rs 94.48 per US dollar
- Previous close
- Rs 94.97 per US dollar
- FCNR(B) inflows
- $127.23 billion
- Total reported inflows
- $136.38 billion, including external commercial borrowings and overseas foreign-currency borrowings
- Facility period
- June 8-August 31, 2026
- Analyst trading levels
- Immediate USD-INR support was cited at Rs 94.10 and resistance at Rs 94.95; another report gave a broader Rs 94.10-Rs 95.50 range
