RBI Measures Led to 32 Billion USD Inflows, Through FCNR(B): Governor Sanjay Malhotra

Banks have mobilized over 32 billion USD, primarily via Foreign Currency Non-Resident Bank (FCNR(B)) deposits, as a result of the Reserve Bank of India’s recent actions to draw in foreign capital, according to Governor Sanjay Malhotra said in an interview with The Hindu Businessline.

Since the restrictions were made public in June, according to Malhotra in an interview, international investors have invested more than 7 billion USD in government bonds. Even in the face of challenging conditions for emerging countries, the governor stated that the substantial investor interest would improve India’s currency stability and balance of payments.

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Following its current depreciation, both in real and nominal effective exchange rate terms, the rupee has become undervalued, according to Malhotra. According to Malhotra, the RBI would first take all necessary steps to maintain price stability before assessing how much monetary policy might help growth.

He stated that the data driven method would still be used by the Monetary Policy Committee. Policymakers had not yet observed indications of ingrained, widespread price pressures, despite the fact that inflation had climbed beyond the 4 percent objective.