The Reserve Bank of India’s recent forex measures could draw $80–85 billion in inflows, according to a report by the SBI research department released on Monday.
“We believe that the total amount mobilised so far in 45 days has crossed the number mobilised in 2013 in three months… Overall, we believe, FCNR (B) deposits in the range of $65-70 billion should be received. And including OFCB and ECB, it should be at $80-$85 billion,” the report said. Public sector banks are major drivers of this mobilisation, it said.
According to the RBI data released last week, banks had garnered $17.41 billion through FCNR (B) deposits under the RBI’s special swap scheme as of July 17, contributing to total inflows of $20.72 billion. These measures were introduced in June to strengthen the balance of payments and support the rupee.
RBI Governor Sanjay Malhotra on Monday told a news agency that banks have mobilised almost $32 billion via recent measures, with most of it coming through FCNR (B) deposits. He added that the total inflows are likely to be robust, considering the current pace.
“We also believe that significant majority of existing FCNR deposits which are going to mature in August/September will be renewed under the new scheme (gravitated by higher interest rates) and will boost the FCNR (B) inflows,” the report said.
These measures are also expected to improve the country’s balance of payment. “The overall balance of payment would be in surplus of more than $50 billion for FY27. This is way above our previous estimate of $65-70-billion deficit. Subsequently, the current account deficit would be in the range of 1.0-1.2% of GDP for FY27,” the report said.