India Attracts $73 Billion In Foreign Currency Inflows Through Special Deposit Scheme
India has attracted over $73 billion in foreign currency inflows within 11 weeks, primarily driven by a special deposit scheme targeting non-resident Indians. The initiative aims to stabilize the Indian rupee amid rising energy prices and capital outflows. Nearly $65 billion of these funds came from Foreign Currency Non-Resident (Bank) deposits, with incentives set to expire on August 31. The Reserve Bank of India is using these inflows to manage currency volatility without directly influencing exchange rates. Analysts suggest the rupee could stabilize around 96.50 per dollar by March 2027. Despite recent energy price hikes and a widening trade deficit, the rupee has remained relatively stable due to this influx. The finance ministry described the scheme as one of India's most effective foreign-currency mobilization efforts in terms of cost-efficiency. However, concerns remain about future capital outflows once incentives end.
Topics: currency stability foreign exchange inflows India non-resident Indians (NRIs) RBI intervention