The RBI said $127.23 billion came through foreign currency non-resident deposits, helping strengthen India’s forex reserves and giving the central bank greater room to support the rupee.
India’s central bank said on Wednesday it had attracted $136.38 billion in inflows under its forex swap facility as of August 31, with most of these coming via a dollar deposit scheme aimed at the diaspora.
Banks in India received $127.23 billion via foreign currency non-resident deposits, $3.89 billion via external commercial borrowings and $5.26 billion through overseas foreign currency borrowings.
In June, the Reserve Bank of India had introduced a set of measures, including concessional swap facilities aimed at attracting foreign currency to shore up the rupee, which fell to record lows earlier this year.
Banks swap the inflows received with the RBI, boosting India’s foreign exchange and giving the central bank more room to intervene in support of the rupee.
While the dollar deposit scheme was scheduled to close at the end of September, the central bank chose to end it earlier on August 31. The window for bank borrowings remains open.
In times of currency stress, India has often relied on its diaspora to attract dollar deposits, offering subsidies on hedging costs as an incentive. The scheme was last used in 2013 and attracted $26 billion.
India’s forex reserves rose to a record of $729.33 billion in the week to August 21, central bank data showed. The RBI has stepped up dollar sales to support the rupee over recent days, traders said.
More from BusinessThe rupee ended little changed on Wednesday as continued support from the central bank offset rising dollar demand from importers and the impact of a spike in oil prices and Treasury yields.
