India’s Foreign Exchange Inflows Strengthen Rupee Outlook
City News Mumbai••6 views•1 min read
India’s large foreign-currency inflows, including NRI deposits, are giving the Reserve Bank of India greater room to support the rupee as global currency markets remain volatile.
India’s foreign exchange position has received a significant boost from a surge in foreign-currency inflows, strengthening the Reserve Bank of India’s ability to manage volatility in the rupee.
According to a Reuters report, total inflows through special foreign-currency mobilisation schemes have reached around $136.38 billion. Foreign-currency non-resident deposits account for approximately $127 billion of the total, alongside external commercial borrowings and overseas foreign-currency borrowings.
The stronger inflow has increased India’s foreign exchange reserves and provided the central bank with additional flexibility to intervene in currency markets. The rupee recently settled around ₹94.97 against the US dollar, with traders expecting further movement depending on global economic data and US Federal Reserve policy.
Market participants are also watching developments in Asia and the United States, including upcoming US employment data and expectations surrounding the Federal Reserve’s next interest-rate decision.
