Mumbai, September 3: The Indian rupee strengthened by 67 paise against the US dollar on Thursday, reaching its highest level in two months. This marks the largest gain for the domestic currency against the dollar since June. The surge is attributed to higher-than-expected inflows under the Reserve Bank of India’s (RBI) Foreign Currency Non-Resident (Bank) or FCNR(B) scheme.
The rupee opened at 94.30, compared to the previous closing of 94.97. By 1 PM, it was trading at 94.46 against the dollar.
The RBI’s initiative to attract US dollars through the FCNR(B) deposits has received an overwhelming response from investors. As of August 31, 2026, total inflows reached $127 billion, significantly exceeding the anticipated $100 billion.
According to data released by the RBI, as of August 31, the inflows included $127.226 billion in FCNR(B) deposits, $3.891 billion in External Commercial Borrowings (ECB), and $5.260 billion in Overseas Foreign Currency Borrowings (OFCB).
To bolster the rupee’s position, the RBI announced the launch of the FCNR(B), ECB, and OFCB schemes under a special US dollar swap facility on June 8.
The RBI indicated that the FCNR(B) deposits were open to investors only until August 31, while the ECB and OFCB schemes allow investments until December 31, 2026.
Currency market experts suggest that the rupee’s trading range in the short term could be around 94.10-95.50. They also noted that if the rupee breaks below the 94.10 level, it could potentially drop to 93.50. The RBI’s strong foreign exchange position will help prevent significant depreciation of the rupee while providing more room to rebuild foreign exchange reserves.
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