Now Reading: FCNR(B) inflows may reach $85 bn: SBI Research
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FCNR(B) inflows may reach $85 bn: SBI Research
SBI Research expects FCNR(B) deposits to hit $65-70 billion by the scheme's end, and including OFCBs and ECBs total mobilisation could rise to $80-85 billion. The pace has accelerated sharply: the first…
The Story in Brief
SBI Research expects FCNR(B) deposits to hit $65-70 billion by the scheme's end, and including OFCBs and ECBs total mobilisation could rise to $80-85 billion. The pace has accelerated sharply: the first $20 billion took 38 days, the next just 14 days. Total mobilisation so far stands at $56.8 billion, with $16 billion added between August 1 and 13 alone.
The RBI shortened the scheme by one month, but SBI Research said the corpus target remains achievable. The central bank has already recouped $31.2 billion in foreign currency assets, about 55% of mobilisation. The inflows are boosting banking system liquidity, with potential flows of Rs 8-9 lakh crore. The rupee has stayed under pressure, stabilising around Rs 95-95.5 after breaching Rs 96.
The Indian Opinion
Commentators often assume massive capital inflows will automatically strengthen the rupee. The data shows otherwise: despite record FCNR(B) flows, the rupee fell and is now steady only after crossing 96. The RBI's decision to shorten the scheme is prudent, not a sign of panic, given the target is nearly met. Watch whether the rupee can hold 95-95.5 or if the RBI lets it slide further to support exports, and whether the liquidity boost will actually lower bond yields as predicted.
Source: businesstoday.in
This story was synthesised by AI from the source linked above.
