Government and RBI measures to attract USD30–50 billion in foreign inflows stabilize USD/INR in a 94.00–95.00 range since mid-June.
The Indian rupee has stabilized around 94.74 against the US dollar, trading within a 94.00–95.00 range since mid-June. This follows coordinated policy measures by the Indian government and the Reserve Bank of India to boost foreign inflows, potentially drawing USD30–50 billion.
The package includes expanded access to long-term government bonds, tax exemptions for foreign investors, subsidized FX swaps, and enhanced hedge support for FCNR(B) deposits. Earlier, USD/INR volatility had been driven by global risk sentiment and domestic growth concerns.
India’s June flash PMI indicated moderating growth, with manufacturing facing weaker demand and supply chain disruptions, while services remained resilient. A potential easing of Middle East-related supply bottlenecks could support a rebound in activity.