Foreign exchange inflows surge as RBI’s new schemes attract $136bn

The Reserve Bank of India’s June‑launched foreign‑exchange attraction programmes have produced a substantial inflow of $136.4 billion, according to a Bank of Baroda study. Most of the money, $127.2 billion, entered the system through non‑resident Indian (NRI) FCNR(B) deposits, which were made more appealing by raising interest rates to the 6‑7 % range for three‑ to five‑year tenures.

Supplementary channels added $5.3 billion via overseas foreign‑currency borrowings (OFCB) and $3.9 billion through external commercial borrowing (ECB). These resources have helped shore up India’s foreign‑exchange reserves, lifting them to a record $729.3 billion.

The RBI is also managing liquidity by conducting a VRRR auction worth ₹53.5 trillion between 6 August and 2 September. This move aims to temper monetary excesses that could arise from the large inflows.

Analysts note that the robust inflow environment mitigates the impact of external headwinds such as higher oil prices and capital outflows linked to geopolitical tensions, thereby supporting the rupee’s stability.