RBI's capital flow measures attract nearly $41 bn in inflows

The Reserve Bank of India's (RBI) recent measures to boost capital inflows and support the rupee have attracted nearly $40.81 billion, according to data released by the central bank on Saturday.The RBI had announced a series of foreign exchange measures in June, including concessional hedging facilities and swap arrangements, to encourage overseas fundraising by banks, state-run companies and through Foreign Currency Non-Resident (FCNR) deposits.
According to sources, of the total inflows, banks mobilised $36.7 billion through FCNR deposits. Under the special facility, lenders are allowed to swap these deposits with the RBI under a zero-cost hedging mechanism, which will remain available until the end of September.
The central bank also said $1.5 billion was raised through swap facilities for External Commercial Borrowings (ECBs), while $2.57 billion came through Overseas Foreign Currency Borrowings undertaken by authorised lenders. This facility will remain open until the end of December.The measures were introduced to strengthen foreign exchange inflows, improve foreign currency liquidity and provide support to the rupee amid global financial market uncertainties.According to SBI Economic Research, FCNR deposits are expected to reach $65-70 billion, while total inflows under the RBI's special capital-flow measures could rise to $80-85 billion by the end of the schemes.

(Business Correspondent)