Overview
- India's foreign exchange reserves rose by $7.26 billion to about $674 billion, driven by a $4.5 billion gain in foreign currency assets and a $2.6 billion increase in gold holdings.
- The Reserve Bank of India announced a limited‑period package on June 5 that loosens rules and offers concessional swaps to boost Foreign Currency Non‑Resident (Bank) or FCNR(B) deposits and attract external commercial borrowing.
- State banks and other lenders have begun mobilising FCNR(B) deposits under the scheme and the finance ministry plans meetings with public sector banks, IDBI and other institutions to speed up deposit and overseas bond flows.
- Economists caution that inflows have been gradual and it is too early to credit the measures for a sustained rebuild of reserves, with analysts saying a clearer picture is likely by September.
- Reserves matter for rupee stability and to pay for imports such as crude oil; pressures that drained stockpiles include prior RBI dollar sales, higher oil bills, slower foreign investment and a sharp fall in NRI dollar deposits.