RUPEE IN FOCUS
The Indian currency opened at 94.30 per US dollar, compared with Wednesday’s (September 2) close of 94.97. The week started on a negative note for the currency.
In addition, the 10-year bond yield remained at 6.94%.
The rupee is still encountering difficulties due to the continuous hedging demand from domestic corporations and the irregular maturity of derivative contracts, further exacerbated by consistently elevated oil prices.
HOW RBI MEASURES AND FCNR-B INFLOWS ARE SUPPORTING THE CURRENCY
India has drawn in an unexpectedly high $136.38 billion in foreign investments through specialised programmes, as reported by the central bank on Wednesday, a Reuters report said.
This influx, as per the same report, has enhanced foreign exchange reserves and fortified its capacity to protect the rupee from external pressures.
The initiatives, introduced in June in response to soaring oil prices that threatened to create a deficit in India’s balance of payments, were designed to attract stable dollar inflows as the nation faced rising import costs due to supply chain disruptions related to the US-Iran conflict.
The Reserve Bank of India’s foreign-currency deposit programme, aimed at the diaspora, constituted the majority of these inflows, significantly exceeding the $80 billion to $90 billion that economists had predicted.
Indian banks successfully raised $127.23 billion through non-resident foreign-currency deposits, in addition to $3.89 billion from external commercial borrowings and $5.26 billion from overseas foreign-currency borrowings, according to a statement from the RBI.
The last similar initiative, initiated in 2013, garnered approximately $26 billion.
The dollars acquired through this program are exchanged by banks with the central bank, which directly contributes to the nation’s foreign exchange reserves, now at a record high of $729.33 billion as of the week ending August 21.
These inflows enhance the RBI’s ability to protect the rupee from the effects of rising oil prices and increasing US Treasury yields. Traders have noted that the central bank has intensified its dollar sales in recent days to bolster the currency.
OTHER FACTORS AT PLAY
Meanwhile, crude oil saw its prices stabilise, as the rate of the benchmark, Brent Crude, remained around the $95 mark as Donald Trump dismissed the possibility of further military escalation.
Furthermore, another critical factor placating the currency is gold. Gold futures rose 0.48% to $4,435.60. Silver futures rose 0.79% to $65.98.
(Edited by : Juviraj Anchil)
First Published: Sept 3, 2026 9:07 AM IST
