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4 September 2026

Indian rupee appreciation due to NRI deposits

The topic discusses specific financial instruments like FCNR(B) and ECBs used by the RBI to manage currency volatility, which directly relates to the mobilization of resources and the economic impact of the Indian diaspora.

1 min read Day 9 of 10 1 questions 1 prelims

Notes

  • The Indian rupee reached a two-month high of ₹94.60 against the US dollar on September 3.
  • The Reserve Bank of India (RBI) successfully mopped up $137 billion through specific financial instruments.
  • Instruments utilized include FCNR(B) (Foreign Currency Non-Resident Bank) deposits, External Commercial Borrowings (ECBs), and overseas foreign currency borrowings.
  • The rupee opened at ₹94.30, reflecting an appreciation of 50 paise from the previous close of ₹94.70.
  • The currency experienced gradual weakening throughout the trading session to settle at the closing level of ₹94.60.

Part of a longer story

This is day 9 of 10 in RBI foreign currency swap facility, which has been running since 14 July 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

  1. Analyze the role of capital inflows, such as FCNR(B) deposits and External Commercial Borrowings, in influencing the volatility of the Indian rupee and the management of foreign exchange reserves. 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00

Prelims

  1. Which of the following instruments was utilized by the Reserve Bank of India to mop up liquidity and influence the rupee's exchange rate as per recent reports?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-09-04/indian-rupee-appreciation-due-to-nri-deposits