RBI Inflow Measures Support Indian Rupee Against US Dollar

The Indian Rupee has been under pressure from rising oil prices, but recent measures by the Reserve Bank of India (RBI) to attract foreign inflows may provide some support. Commerzbank analysts note that USD/INR rose 0.3% over the week, reaching 96.57 on Friday.

The RBI's efforts to draw in foreign funds through various schemes, including FCNR(B), ECB, and OFCB, are gaining traction, with domestic banks reporting $20.7bn in deposits as of July 17. These measures are estimated to attract up to $80bn by year-end.

However, the US imposed a new 10% tariff on imports from India on July 24, following findings related to forced labor in supply chains. The Commerce Ministry stated that 45% of goods, such as electronics and pharmaceutical products, will be exempt from this tariff.