July 27 (Reuters) – Dollar-inflow schemes announced by the RBI (Reserve Bank Of India) in June have brought in close to $32 billion, the RBI governor, Sanjay Malhotra, told The Hindu Businessline newspaper in an interview published on Monday. The inflows are likely to boost India’s balance of payments, he said.
Here are some key comments:
- Most of the $32 billion raised so far has come from the foreign currency non-resident deposit scheme, Malhotra said.
- In addition, about $7 billion has come in as foreign portfolio investments into debt securities following tax changes.
- Have not seen any evidence that a bulk of the FCNR flows are on account of rebooking of deposits.
- An increase in government cash balances is partly the reason for dollar inflows not reflecting on rupee liquidity.
- There has been no change in the RBI’s policy on the rupee and the central bank only intervenes to curb excessive volatility.
- It would be reasonable to think the rupee is not undervalued.
- The current level of the policy repo rate is appropriate for the prevailing growth-inflation dynamics.
- Generalised inflation pressures are modest so far but the risk of higher food and fuel prices translating into broad-based inflation environment is real.
