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Informist, Wednesday, Aug. 5, 2026

 

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--RBI Malhotra: Hope to get healthy FCNR(B) deposits going forward 
--RBI Malhotra: No proposal to close FCNR(B) scheme in advance 
--RBI Malhotra: Don't have any target in mind for FCNR(B) deposits 
--RBI Malhotra: There is no proposal to extend FCNR(B) window 
--RBI Malhotra: There is no proposal, no need to extend FCNR(B) window 

--RBI Malhotra: Recent FX schemes fortfied India's external position, BoP 
--RBI Malhotra: Measures will help channel expectations on rupee exchange rate 
--RBI Malhotra: Quite possible rupee may strenghten on West Asia de-escalation 
--RBI Malhotra: Rupee may strengthen going forward if W Asia war de-escalates 
--RBI Malhotra:Don't want self-fulfilling expectations built into exchange rate 
--RBI Malhotra: Will continue to get good capital flows 
--RBI Malhotra: FX flows have been robust 
--RBI Malhotra: Macros are strong, we should continue to get capital flow 

 

MUMBAI – There is no proposal under consideration to close the foreign currency non-resident (banks) deposit scheme prematurely or to extend it beyond Sept. 30, Reserve Bank of India Governor Sanjay Malhotra said Wednesday. "There is neither a proposal nor there is a need, given the robust flows, to extend the timeline (of FCNR(B) window) as of now," Malhotra told the post-policy press conference here.

 

The central bank had in June announced a host of measures to attract foreign capital. Among the measures was a facility to cover the full hedging costs for banks raising fresh three- to five-year FCNR(B) deposits until Sept. 30. The swap facility, which came into effect on Jun. 8, will remain open till Oct. 16 for deposits mobilised between Jun. 8 and Sept. 30.

 

As per latest available data, the RBI's measures to garner inflows through FCNR(B) deposits had attracted $36.73 billion from Jun. 8 till Friday. The governor is hopeful of more healthy FCNR(B) deposits going ahead. However, he added that the RBI has no target in mind for total inflows through the scheme.

 

Asked what the RBI plans do with the dollar inflows from its schemes, Malhotra said the same is decided by a high-level committee. "We buy or sell our currencies and whatever are our reserves, for that there is a high-level committee, there are members from the government also which participate regularly in those meetings, and we take a call as to how we are going to manage those reserves."

 

Apart from inflows from the RBI's measures, India should continue to see good capital inflows, Malhotra said. "FDI (foreign direct investment) is certainly more durable, more sticky, and more preferable," he said. "We got good, robust gross FDI numbers. Even net FDI is positive. One is the number of agreements that have been signed on the trade agreement part, even that indirectly helps investment."

 

Going forward, Malhotra expects India's external position to be better. He also expects the RBI's capital inflow measures to help the expectation channels for the rupee's exchange rate.

 

Further, Malhotra said the rupee may appreciate in case the war in West Asia de-escalates, and it is the RBI's endeavour to see that the trajectory for the rupee remain orderly and there is no disruptive movement and self-fulfilling expectations getting built into the exchange rate. 

 

"Our policy  has always been that the markets determine the prices, level, and the band. We only intervene when there is an excessive volatility or there are speculative pressures that are getting built in," he said. Since the last monetary policy decision on Jun. 5, the rupee has depreciated 0.2% against the dollar.  End

 

US$1 = INR 95.11

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Pratiksha

Edited by Rajeev Pai

 

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