India’s foreign exchange reserves saw a significant increase of $7.260 billion to reach $674.193 billion by the week ending July 3, as per data from the Reserve Bank of India (RBI). During the same period, the value of India’s gold reserves also went up by $2.669 billion to $105.205 billion. Additionally, the country’s holdings of Special Drawing Rights (SDRs) with the International Monetary Fund rose by $65 million to $18.623 billion.
Despite a recent decline, India’s forex reserves remain one of the highest globally, though they are still below the peak of $728.494 billion recorded in February. Banks have observed a gradual rise in overseas funds following the introduction of the RBI’s revised Foreign Currency Non-Resident Bank (FCNR-B) deposit scheme. Reports suggest that banks have attracted around $3-4 billion through FCNR-B deposits, with expectations of further acceleration in collections, especially from NRIs in the Gulf region.
The revised FCNR-B scheme is anticipated to draw in $40-50 billion in fresh deposits over time, supported by higher interest rates and the RBI’s decision to cover banks’ hedging costs. Banks are actively promoting awareness of the scheme among overseas depositors, particularly targeting NRI customers in key markets. The Gulf region is expected to play a significant role in contributing to the incremental FCNR-B deposits, driven by Indian expatriates residing and working in the area.
