Industry Odisha Bureau, Jul 25: Since India rupee (INR) has reportedly been on a depreciation mode against the USD since long, although registering an occasional appreciation, financial experts and analysts have reportedly opined that the pendulous nature of the Indian currency (INR) has been emerging as the weakest link in India’s resilient growth story despite the all-out efforts undertaken by the Reserve Bank of India (RBI) to revive the country’s fiscal health conditions.
Citing a glaring instance, the analysts have reportedly argued that, “The rupee (INR) appreciated 0.6 per cent against the US dollar (USD) during June after weakening for three consecutive months in the current year. However, it got slipped 0.8 per cent again by July 21 proving the gains short-lived.”
“June marked the first meaningful improvement in the rupee since March as global financial conditions turned more supportive for emerging markets,” quipped the analysts.
Nevertheless, analysts have reportedly lauded “RBI’s concerted efforts of launching the special Foreign Currency Non-Resident [FCNR(B)] deposit scheme on June 5 this year in a bid to boost confidence in external liquidity, apart from the Overseas Foreign Currency Borrowings (OFCBs) and the External Commercial Borrowings (ECBs).”
The RBI’s latest data reportedly stated that, “Indian banks mobilized $20.72 billion under the facility between June 8 and July 17, comprising $17.41 billion (about 84% of the total) FCNR(B) deposits, $1.97 billion OFCBs and $1.34 billion ECBs.”
In this context, the analysts have reportedly estimated that, “The inflows have already crossed $20 billion in just over a month this time, while the inflows could eventually reach $50–80 billion before the window closes in September this year.”
The financial experts and analysts have, however, reportedly remarked that, “Sustaining the INR’s gains would require stronger Foreign Direct Investments (FDIs), sustained portfolio inflows and healthy export growth, or else, INR would keep on emerging as the Achilles heel in India’s robust growth story.”
