Politics · India Bureau
RBI's forex forward commitments surge to record $136.7 billion
The Reserve Bank of India's forward foreign exchange book has reached an all-time high, driven by a substantial influx of overseas deposits through special schemes. Foreign currency deposits accounted for the bulk of inflows mobilised under recent RBI measures.
LSN India ·
The RBI's forward foreign exchange commitments have climbed to a record $136.7 billion, reflecting robust overseas deposit mobilisation as India seeks to bolster its external finances amid global economic uncertainties.
The surge reflects strong investor participation in foreign currency deposit schemes introduced by the central bank. Through July 31, Foreign Currency Non-Resident (FCNR(B)) deposits had generated $36.7 billion of the total $40.8 billion in foreign exchange inflows mobilised under the special measures, indicating substantial offshore investor confidence in Indian rupee-denominated assets.
The measures underscore the RBI's efforts to manage foreign exchange reserves and stabilise the rupee while maintaining adequate liquidity buffers. The accumulation of forward commitments provides the central bank with greater flexibility in managing currency fluctuations and supporting domestic financial stability.
Experts suggest the strong uptake reflects improved sentiment towards Indian assets and the central bank's credibility in managing economic cycles. The inflows provide additional cushion for India's external account while reducing reliance on volatile portfolio flows.