Since June, measures to attract overseas capital have brought in more than
$40bn, bolstering the Reserve Bank of India’s foreign-exchange buffer, the RBI
said. As of July 31, FCNR(B) deposits totaled $36.72bn; together with other
overseas borrowings the sum is about $41bn. The RBI conducted roughly $7bn of FX
sales on July 24 to defend the rupee, its largest direct intervention in months.
Middle East tensions had pushed oil above $100/bbl and pressured the rupee; oil
has since eased to around $90/bbl. The RBI governor said this week that recent
rupee weakness reflects geopolitical tensions, dollar strength and EM
volatility, not a deterioration in India’s economic fundamentals.
