India Attracts $32 Billion Foreign Capital Boost

India has seen a substantial influx of foreign capital, with nearly $32 billion mobilized under the Reserve Bank of India's (RBI) special measures. The majority of these inflows, exceeding $26 billion, have arrived through Foreign Currency Non-Resident (Bank) deposits within approximately 45 days. The RBI is actively monitoring whether existing deposits are being rolled over to take advantage of the new scheme's higher interest rates. However, Governor Sanjay Malhotra stated there is no significant evidence to suggest this practice is widespread enough to cause concern. The RBI introduced these measures on June 5 to strengthen the balance of payments, support the rupee, and mitigate imported inflation. The FCNR(B) deposit window remains open until September 30, while facilities for External Commercial Borrowings and Overseas Foreign Currency Borrowings continue until December 31. In addition to deposits, over $7 billion has flowed into government securities since June 5. Despite these robust inflows, the market is observing the rupee's continued weakening. Public sector banks have led the mobilization efforts, utilizing established relationships with international clients. The RBI has adopted a measured approach to intervening in the foreign exchange market, selling an estimated $14 million daily, which has had some effect but has not significantly reduced currency volatility.