RBI’s $136 Billion FCNR Mop-Up Builds Forex Cushion As Global Rates And Oil Prices Rise

The RBI’s $136 billion FCNR mop-up has provided India with an important foreign exchange cushion amid rising oil prices, bond yields and global volatility. The move is being viewed as a timely shock absorber for the economy as borrowing costs rise globally. Arun Kejriwal, Market Expert, explains why the changing interest-rate environment in the US and Japan could create fresh challenges for global capital flows. With US 10-year yields moving higher and major holders reducing Treasury exposure, the global cost of money is becoming more expensive. The discussion examines what this means for India’s economy, currency and financial markets.