India’s central bank counters oil-driven depreciation pressure with record foreign currency inflows and intervention.
The Indian Rupee (INR) nears its record low of 96.9550/USD as Brent crude surpasses $90, increasing depreciation risks. The Reserve Bank of India (RBI) has intensified foreign exchange intervention in both onshore and offshore markets to stabilize the currency.
Since early June, the RBI has attracted over $20bn through FCNR(B) deposits, external commercial borrowings, and overseas bank borrowings. Inflows include $17.4bn from FCNR(B) deposits, $1.34bn from commercial borrowings, and $1.97bn from overseas bank borrowings. The government targets total inflows of $90bn, exceeding market expectations and easing near-term funding concerns.
Despite Middle East geopolitical risks, the inflows are expected to support the INR, though oil price volatility remains a key downside risk.