India’s rupee remains range-bound despite $72.8bn in FCNR swap inflows, offset by trade pressures and hedging demand.
The Indian rupee has maintained a tight range against the US dollar, trading between 95.50 and 96.00, as strong inflows from FCNR (B) swap schemes and higher FX reserves counterbalance persistent trade deficit pressures. Banks raised $72.8bn via special swap windows by 21-Aug, a $20bn surge since mid-August, with $65.4bn sourced from deposit programs.
Portfolio flows show mixed trends, with $2.3bn in equity inflows in August, while debt markets attracted $7.3bn in FY27 year-to-date. Despite accelerating inflows, hedging demand and official intervention have capped significant rupee gains. The pace of fund-raising has quickened, with $16bn added in nearly a week, compared to the same amount over a fortnight earlier.
Global yield movements and expectations of a hawkish RBI stance have also influenced onshore markets, though the rupee’s range remains constrained by structural trade imbalances.