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Rupee Slumps: India's 2013 Crisis Echoes?
25 May
Summary
- India eyes FCNR(B) deposits, mirroring a 2013 strategy.
- In 2013, the scheme successfully mobilized USD26 billion.
- Current costs for similar schemes are projected much higher.
India is facing renewed currency volatility, drawing parallels to the economic conditions of 2013. During that period, the country successfully stabilized the rupee by leveraging Foreign Currency Non-Resident (B) deposits, which mobilized a substantial USD26 billion.
The current depreciation of the rupee has led policymakers to consider a similar FCNR(B) deposit scheme. This strategy aims to arrest the currency's fall and restore confidence in the market.
However, a key concern is the significantly higher cost associated with such a scheme in the present economic climate. This raises questions about the potential financial burden and the overall effectiveness of repeating the 2013 strategy.
