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Rise in FDIs May Force RBI to Drain as Much as $22 bn
August 16, 2017
With the Foreign Direct Investments (FDI) flowing in at a high rate, the Reserve Bank of India may need to drain as much as $22 billion of liquidity from the system to take in the dollar currency and sell rupees.
Thanks to India’s improved economic growth and maintenance of low inflation, the foreign investments in the country in the form of shares and debts stood at $31 billion this year in comparison to last year’s $2.7 billion.
The strong rise in foreign investments has already strengthened rupee by 7% against the dollar and forced the RBI to buy more than $10 billion.
