RBI's incentives may attract short-term foreign inflows and ease pressure on the rupee, but they do little to address weak FDI and sustained foreign investor outflows
The move is expected to support recently announced measures to attract foreign capital, while easing regulatory constraints on banks participating in RBI swap facilities
The forex swap window, open until October 2026, will enable banks to mobilise fresh FCNR(B) deposits while the RBI bears the hedging cost on eligible inflows
India reported a current account surplus of USD 7.1 billion, or 0.7 per cent of GDP, in the January-March quarter of 2025-26, according to the Reserve Bank data released on Monday. The surplus stood at USD 13.7 billion, or 1.4 per cent of GDP, in the fourth quarter of 2024-25. However, for the entire fiscal year, the current account deficit stood at USD 25.2 billion, or 0.6 per cent of GDP, compared to USD 22.9 billion, or 0.6 per cent of GDP, during 2024-25. "Net services receipts increased to USD 60.4 billion in Q4 2025-26 from USD 53.3 billion a year ago," according to RBI's data on Developments in India's Balance of Payments during the Fourth Quarter (January-March) of 2025-26. Services exports increased on a year-on-year basis in major categories, such as computer services and other business services. On the other hand, the merchandise trade deficit at USD 83.4 billion in Q4 2025-26 was higher than USD 59.3 billion in Q4 2024-25.
RBI ramped up its interventions after the rupee weakened to a record low on May 20, almost hitting the 97 per dollar mark
RBI Governor Sanjay Malhotra said underlying inflation pressures remained benign, although second-round effects warranted vigilance
The government and RBI have unveiled tax and policy measures to revive foreign investment, strengthen the balance of payments and support the rupee
Bond tax exemption, easier access for foreign funds may help cover FY27 BoP gap
Gross FDI inflows may surpass $100 billion in FY27, RBI Deputy Governor Poonam Gupta said, citing strong investment momentum despite global uncertainty
The Centre has extended the tenure of RBI Deputy Governor Swaminathan J. by two years from June 26, 2026, following his first term at the central bank
RBI's foreign flow measures help Indian currency appreciate to 94.94 against dollar
RBI surveys show Indian households expect inflation to jump amid US-Iran war tensions and weak monsoon forecasts, driving a steep decline in consumer confidence
Most importantly, the slew of reforms announced in today's meeting to support the rupee augurs well for the economy and markets while keeping the growth momentum sacrosanct
In the bond market, the pause combined with a cautious undertone suggests that yields are likely to remain range-bound in the near term, albeit with a discernible upward bias as inflation risks build.
The MPC's approach is data-dependent and cautiously hawkish: it acknowledges weaker growth, flags higher inflationary risks, and keeps policy unchanged for now to watch how the trade-off evolves.
Sarvjit Singh Samra of Capital Small Finance Bank said that RBI MPC has appropriately refrained from deploying interest rates as a tool to counter the recent weakness in the rupee.
The Reserve Bank of India held the repo rate at 5.25 per cent for a third straight review, raising its inflation forecast while warning of risks from the prolonged West Asia conflict
Walmart-owned online fashion retailer paid Rs 2.88 lakh to settle alleged contraventions related to overseas investment reporting and commitments
While a majority of economists expect the central bank to keep rates unchanged, some market indicators like overnight indexed swaps are already pricing in a rate hike
Inflation pressures triggered by an energy price shock means the RBI will likely adopt a hawkish stance and prepare markets for potential rate hikes later this year, economists have said