MUMBAI: Steps taken by India’s central bank to attract more foreign investment and bolster the rupee have resulted in a remarkable inflow of $40.81 billion, as reported on Saturday.
In June, the Reserve Bank of India (RBI) launched several measures aimed at improving foreign currency inflows. These include favorable hedging options and swap agreements designed to facilitate fundraising by state-owned companies, banks, and through Foreign Currency Non-Resident (FCNR) deposits.
Here’s a breakdown of the inflows so far:
The RBI reported that $36.7 billion came from FCNR deposits raised by banks. Financial institutions can swap these deposits with the RBI under a no-cost hedging option available until the end of September.
Additionally, the Indian central bank noted a slight decrease in its foreign exchange forward book, now standing at $103.3 billion.
Furthermore, the RBI indicated that $1.5 billion was secured through swap arrangements for External Commercial Borrowings, while $2.57 billion was raised through Overseas Foreign Currency Borrowings by authorized lenders. This opportunity for borrowing remains available until the end of this year.
According to SBI Economic Research, FCNR deposits and inflows from these initiatives are expected to total between $65 billion and $70 billion, with overall inflows projected to reach $80 billion to $85 billion.
