The Reserve Bank of India successfully attracted $40.81 billion in foreign currency inflows within two months using targeted capital-flow measures introduced in early June 2026. These initiatives have bolstered the rupee and drawn significant interest from overseas investors.
How the RBI pulled it off
Between June 5 and June 8, the RBI launched two key tools to draw foreign currency deposits. First, it offered zero-cost hedging on Foreign Currency Non-Resident (Bank) or FCNR(B) deposits, reducing risk for investors. Second, it expanded the window for foreign investors to access long-dated government securities until September 30, 2026, signaling an open door for capital inflows.
The lion’s share of the $41 billion came from FCNR(B) deposits, which accounted for roughly 90 percent or $36.7 billion. External Commercial Borrowings contributed $1.5 billion, while Overseas Foreign Currency Borrowings made up $2.57 billion. The inflows showed consistency the first month alone brought in over $20 billion, with a similar amount arriving in the second month.
Throughout this period, the RBI held its repo rate steady at 5.25 percent during its June policy meeting, maintaining conditions favorable for investment. Experts like SBI Economic Research suggest that the current figure could represent just half of the total $80 to $85 billion RBI anticipates, with FCNR(B) deposits potentially reaching as much as $70 billion.
The September deadline for the extended government securities access could accelerate inflows further as investors rush to take advantage of this opportunity before it closes.
This material is for informational purposes and does not constitute financial advice.
