When The Rupee Fell, India Turned To NRIs. What Happened Next
Facing a record-low rupee and high energy import costs, the Indian government and the Reserve Bank of India encouraged commercial banks to attract foreign-currency deposits from non-resident Indians. This strategy, previously successful in 2013, helped stabilize the currency by drawing in significant capital.
Why it matters
It illustrates the strategic use of diaspora financial resources as a tool for national economic stabilization during currency crises.
Prime Minister Narendra Modi had a message for hundreds of overseas Indians gathered at Paris' Salle Pleyel concert hall in June: India was counting on its overseas community to send back dollars.As the war in Iran raged, the world's third-largest oil importer was staring at a surging energy bill. This raised concerns about India's need for greenbacks to pay for imports and sent the rupee to a record low. "I would urge all of you to deepen your engagement with India," Modi told the packed crowd at a community event in the French capital. "This will give new strength to India's development journey, while also giving you an opportunity to serve the land of your ancestors."Back home, Indian authorities had already begun laying the groundwork to support the rupee, which had weakened to an exchange rate near 97 per dollar, from about 86 a year ago.
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