RBI Attracts $39 Billion in Foreign Capital Since June

The Reserve Bank of India (RBI) has successfully attracted nearly $32 billion in Foreign Currency Non-Resident Bank (FCNR(B)) deposits and over $7 billion in government securities inflows since June. Governor Sanjay Malhotra defended these measures against liquidity and hedging concerns, stating the central bank uses a system of investing excess foreign currency into foreign assets to eliminate risk.

SBI Research reports that FCNR deposits reached $17.41 billion by July 17, 2026, surpassing the total amount mobilized in the first three months of 2013 within just 45 days. The research division projects total FCNR(B) inflows could reach between $80 billion and $85 billion by the end of the scheme, with public sector banks acting as the primary drivers.

Malhotra also addressed the valuation of the Indian rupee, characterizing it as potentially undervalued in nominal and real effective exchange rate terms. He attributed recent currency depreciation to dollar strength and geopolitical tensions rather than domestic economic weakness. Regarding monetary policy, Malhotra reaffirmed that the Monetary Policy Committee maintains a neutral stance, emphasizing that inflation and price stability remain the primary mandates.