8 hrs ago
India Attracts $136 Billion in Forex Inflows to Defend Rupee
India wanted to make sure it had enough foreign money to protect its currency, the rupee.
The Reserve Bank of India created special programs to attract United States dollars.
These programs brought in about $136.3 billion.
Most of the money came from deposits made by people living outside India.
Other funds came from loans raised by Indian companies overseas.
The money increased India’s foreign-exchange reserves to a record $729.3 billion.
This gives the central bank more ability to respond when global events put pressure on the rupee.
The rupee had fallen to nearly 97 per dollar in May but was at 94.4 per dollar on Wednesday.
The inflows were larger than economists had expected.
India attracted $136.3 billion in foreign-exchange inflows through special measures, according to the Reserve Bank of India.
Foreign Currency Non-Resident Bank deposits generated $127.2 billion before the scheme ended on Monday.
External commercial borrowings and overseas foreign-currency borrowings raised $3.8 billion and $5.2 billion, respectively.
India’s foreign-exchange reserves reached a record $729.3 billion in the week ending August 21.
The inflows exceeded economists’ expectations of $80 billion to $90 billion and helped support the rupee amid high energy prices.
- Who
- The Reserve Bank of India, Indian banks, non-resident depositors and overseas borrowers were involved.
- What
- India attracted $136.3 billion in foreign-exchange inflows through special deposit and borrowing measures.
- Where
- The funds were mobilized through India’s banking system and overseas borrowing channels.
- When
- The measures were introduced in June; the deposit scheme ended on Monday, while two borrowing schemes remain open until December 31.
- Why
- The inflows strengthened India’s foreign-exchange reserves and helped the central bank defend the rupee against external shocks, including pressure from elevated energy prices.
Key facts
- Total inflows
- $136.3 billion
- Foreign Currency Non-Resident Bank deposits
- $127.2 billion
- External commercial borrowings
- $3.8 billion
- Overseas foreign-currency borrowings
- $5.2 billion
- Foreign-exchange reserves
- A record $729.3 billion in the week ending August 21
- Rupee exchange rate
- The rupee was nearly 97 per United States dollar in May and 94.4 per dollar on Wednesday
- Economists’ forecast
- $80 billion to $90 billion in inflows
Sources
Related news
India’s Forex Reserves Hit Record $729.3 Billion Amid Inflows
RBI Expects $80 Billion Forex Inflows to Bolster Reserves
India’s Forex Reserves Hit Record High on Foreign Inflows
India Forex Reserves Reach Record High After RBI Dollar Measures
India Draws Record $127 Billion Through Special FCNR Window
RBI Forex Swap Draws $136.37 Billion, Led by FCNR(B)
Rupee Jumps 67 Paise to Two-Month High as FCNR-B Inflows
Stocks to Watch Thursday as Key Corporate Developments Drive Focus
Rupee Slips Against Dollar Amid Oil and Tension
Rupee Climbs to Two-Month High on RBI Intervention