Dollar inflows into foreign currency non-resident (FCNR) deposits saw the biggest rise in November, the last month before which the Reserve Bank of India’s (RBI) special swap facilities ended. In November, FCNR inflows were over $13 billion, taking the outstanding to $38.62 billion, data from the RBI showed. This is a steep rise from October, wherein inflows were about $5.5 billion.
Data from the RBI monthly bulletin showed that non-resident rupee (NRE) deposits saw an outflow for the second straight month of $151 million. Inflows into NRE deposits had been rising in months before September given the high interest rates offered by banks after the RBI deregulated the interest rates.
However, some of these inflows seem to have flown into FCNR deposits since September. FCNR deposits had seen intermittent outflows until then.
In September, the RBI announced special swap windows, through which banks can swap the dollars raised through FCNR deposits with the RBI at a swap rate of 3.5%, far lower than the market rate of around 7.5-8.0%.
In total, NRI deposits garnered over $32 billion during April-November period, up from $11 billion a year ago. Both FCNR and NRE deposits saw equal inflows in the said period, unlike the outflows from FCNR deposits a year ago, data showed.