NRI deposits flows doubled to $7.8 bn in April-August: RBI Bulletin
Indian diaspora appear extremely bullish on the Indian economy as aggregate inflows to NRI deposits more than doubled.
Inflows into NRI deposit schemes amounted to $7.8 billion in April-August this year to compared to inflows worth $ 3.7 billion in the same period a year ago, the latest data released in the Reserve Bank of India’s latest monthly bulletin.
Both dollar (FCBR(B)) and rupee deposits (NRE(RA)) surged reflecting higher returns in the Indian markets as also the strong fundamentals.
Of the $7.8 billion inflows of NRI deposits, $3.5 billion flowed to FCNR (B) — Foreign currency non- resident(Banks) deposits which are essentially dollar deposits and the foreign exchange risk is borne by the bank which accepts the deposit. While $ 2.5 billion went to NRE(RA)- non-resident external (rupee accounts) deposits which are rupee deposits where the currency risk is borne.
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Significantly, flows to NRE (RA) normally surge when the investor in such deposits expect the rupee to strengthen in the future so that the depositor can take back home higher amounts of dollars on maturity of the deposits which typically range from one to five years in tenor.
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