economy
RBI’s great dollar haul: Where are the $73 billion going?
India has mobilised about $73 billion in foreign currency in under 11 weeks, largely through FCNR(B) deposits, yet the rupee remains near ₹95-96 per dollar. The inflows are primarily strengthening RBI’s foreign-exchange buffers rather than being used to push the currency higher.
Context
The has successfully mobilized approximately $73 billion in foreign exchange inflows, primarily through the deposit scheme. Despite this massive influx of dollars, the Indian Rupee has not significantly appreciated against the US Dollar. This is because the is warehousing these dollars to build its foreign exchange reserves, aiming to enhance macroeconomic stability and build a buffer against external shocks rather than intervening in the spot market to manipulate the exchange rate.
Exam Perspectives
Key References
AI-generated study notes · sourced from Economic Times