FCNR(B) inflows stabilise rupee but fail to trigger 2013-style rally
Heavy foreign-currency inflows have strengthened the central bank’s ability to manage volatility, but broader global forces continue to shape exchange rates.
The Reserve Bank of India's FCNR(B) deposit scheme has attracted over $52 billion, potentially surpassing $80 billion if the window remained open until September. However, the rupee has not appreciated significantly, contrasting with the 2013 FCNR(B) program which helped restore confidence following the taper tantrum. The rupee gained 4.9 percent from 65.70 per dollar in August 2013 to 62.45 by November 2013, and further strengthened to 59.89 by March 2014, a total appreciation of 8.8 percent.
In contrast, as of June 8, 2026, the rupee has only moved 0.1 percent to 95.71 per dollar since the latest FCNR(B) window opened on June 8. Experts attribute the muted response to a tougher global backdrop and RBI's intervention in the market to limit depreciation pressure. While the FCNR(B) inflows have helped stabilize the currency, they have not triggered a repeat of the 2013-style appreciation.
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