Dollar deluge: NRI deposits lift INR to a 2-month high of ₹94.6
The Indian rupee reached a two-month high of ₹94.60 against the dollar following a massive influx of NRI deposits and RBI intervention. Analysts suggest the currency will maintain a positive bias as the market monitors U.S. employment data.
Why it matters
Currency fluctuations impact India's balance of payments and overall economic stability in the context of global market trends.
The Indian rupee appreciated to a two-month high of ₹94.60 against the dollar on September 3, a day after the Reserve Bank of India (RBI) mopped up $137 billion through FCNR(B) deposits, ECBs (external commercial borrowings) and OFCBs (overseas foreign currency borrowings).
The domestic currency opened at ₹94.30, down 50 paise from the previous close of ₹94.70 against the dollar. The rupee then gradually weakened to settle at the day’s closing level.
The foreign exchange rate rose 7.3% year-on-year, driven by pressure from Foreign Institutional Investor (FII) outflows from India’s stock market. These capital outflows put pressure on India’s balance of payments. To strengthen the country’s foreign exchange reserves, the RBI introduced a swap facility and absorbed the associated costs. This helped attract a substantial $127 billion in FCNR(B) deposits—dollar-denominated deposits from non-resident Indians (NRIs).
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in