Now Reading: FCNR(B) inflows may reach $100 billion by September: Jefferies
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FCNR(B) inflows may reach $100 billion by September: Jefferies
India’s FCNR(B) deposit inflows have reached about $41 billion and could rise to $80-100 billion by September 30, Jefferies said, according to The Economic Times. The RBI introduced concessional swaps in June…
The Story in Brief
India’s FCNR(B) deposit inflows have reached about $41 billion and could rise to $80-100 billion by September 30, Jefferies said, according to The Economic Times. The RBI introduced concessional swaps in June to attract non-resident Indian deposits and support the rupee. The currency had touched 96.96 to the dollar in May and was trading at 95.17 when the report was prepared.
State Bank of India Chairman Challa Sreenivasulu Setty said SBI had mobilised nearly $6 billion and could reach about $10 billion by September-end. He said the deposits would mainly replace bulk and wholesale funding, rather than sharply expand lending. SBI does not plan to raise FCNR(B) rates and retains its net interest margin guidance of around 3%.
The Indian Opinion
The easy story is that FCNR(B) money will automatically rescue the rupee or unleash a lending boom. Neither follows from the data. Jefferies’ estimate is a forecast, while SBI says its deposits will largely replace wholesale funding. The deposits can ease funding pressure, but their cost, maturity and eventual withdrawal matter. The useful test is whether the rupee remains stable after the scheme closes on September 30, not whether inflows touch a headline number.
Sources (2): economictimes.indiatimes.com, bfsi.economictimes.indiatimes.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
