$136 billion forex inflow gives rupee a lift, takes it to two-month high
The rupee's gains came a day after the RBI said it had mobilised about $127 billion through a special programme for the diaspora.
- Sep 3, 2026,
- Updated Sep 3, 2026 6:17 PM IST
The Indian rupee rose to a more than two-month high on Thursday as the Reserve Bank of India sold dollars and fresh foreign-exchange inflows gave the central bank more firepower to support the currency.
The dollar-rupee pair fell as much as 0.74% to 94.2712, its lowest level since June 29, before paring the decline to about 0.5%. The rupee had touched 95.64 on June 29.
The rupee touched 94.27 against the US dollar in morning trade, its strongest level since June 29. It had closed at 94.98 on Wednesday. The currency later pared some of its gains.
The rupee's gains came a day after the RBI said it had mobilised about $127 billion through a special programme for the diaspora.
Inflows from overseas foreign-currency borrowings and external commercial borrowings added another $9.15 billion.
The combined inflows are far above the $80 billion estimate given by RBI Governor Sanjay Malhotra last month.
Don't Miss | Dollar deluge: RBI’s forex scheme draws $136.37 billion
RBI Gets More Room To Support Rupee
The RBI's special USD-INR forex swap facility was introduced on June 8. It covered FCNR(B) deposits, overseas foreign-currency borrowings, and external commercial borrowings.
The facility was launched as the rupee came under pressure from the West Asia conflict, higher oil and energy prices, and a decline in foreign-exchange reserves.
By August 31, total inflows under the scheme had reached $136.37 billion, according to provisional RBI data. FCNR(B) deposits accounted for $127.2 billion, while overseas foreign-currency borrowings brought in $5.26 billion and ECBs $3.89 billion.
The initial expectation was for the scheme to attract $50 billion-$60 billion. That estimate was later raised to $80 billion.
"The total flow under the RBI's plan should comfortably reach about $145 billion, as the facilities other than the FX deposits window will remain open," Anindya Banerjee, an FX analyst at Kotak Securities, was quoted as saying by Bloomberg News.
94 Key Support Level
The improved sentiment around the rupee is being driven by three factors, according to Banerjee: the RBI's increased firepower from the fresh inflows, last week's strong GDP growth numbers, and a large liquidity surplus that is also supportive of growth.
For USD/INR, 94 is now the next key technical support level. "If USD/INR falls below 94, it may trigger hedging by exporters who have been on the sidelines all along, and the INR may rally to 92.50," Banerjee said.
The FCNR(B) window closed for fresh deposits on August 31, a month earlier than initially planned. Swaps under the facility can be availed with the RBI until September 11, while the ECB and OFCB windows remain open until December 31.
CareEdge Ratings said the strong mobilisation had "augmented banking system liquidity and provided banks with greater near-term funding flexibility". It also noted the RBI’s decision to shorten the FCNR(B) deposit window as evidence of the stronger-than-expected response.
The Indian rupee rose to a more than two-month high on Thursday as the Reserve Bank of India sold dollars and fresh foreign-exchange inflows gave the central bank more firepower to support the currency.
The dollar-rupee pair fell as much as 0.74% to 94.2712, its lowest level since June 29, before paring the decline to about 0.5%. The rupee had touched 95.64 on June 29.
The rupee touched 94.27 against the US dollar in morning trade, its strongest level since June 29. It had closed at 94.98 on Wednesday. The currency later pared some of its gains.
The rupee's gains came a day after the RBI said it had mobilised about $127 billion through a special programme for the diaspora.
Inflows from overseas foreign-currency borrowings and external commercial borrowings added another $9.15 billion.
The combined inflows are far above the $80 billion estimate given by RBI Governor Sanjay Malhotra last month.
Don't Miss | Dollar deluge: RBI’s forex scheme draws $136.37 billion
RBI Gets More Room To Support Rupee
The RBI's special USD-INR forex swap facility was introduced on June 8. It covered FCNR(B) deposits, overseas foreign-currency borrowings, and external commercial borrowings.
The facility was launched as the rupee came under pressure from the West Asia conflict, higher oil and energy prices, and a decline in foreign-exchange reserves.
By August 31, total inflows under the scheme had reached $136.37 billion, according to provisional RBI data. FCNR(B) deposits accounted for $127.2 billion, while overseas foreign-currency borrowings brought in $5.26 billion and ECBs $3.89 billion.
The initial expectation was for the scheme to attract $50 billion-$60 billion. That estimate was later raised to $80 billion.
"The total flow under the RBI's plan should comfortably reach about $145 billion, as the facilities other than the FX deposits window will remain open," Anindya Banerjee, an FX analyst at Kotak Securities, was quoted as saying by Bloomberg News.
94 Key Support Level
The improved sentiment around the rupee is being driven by three factors, according to Banerjee: the RBI's increased firepower from the fresh inflows, last week's strong GDP growth numbers, and a large liquidity surplus that is also supportive of growth.
For USD/INR, 94 is now the next key technical support level. "If USD/INR falls below 94, it may trigger hedging by exporters who have been on the sidelines all along, and the INR may rally to 92.50," Banerjee said.
The FCNR(B) window closed for fresh deposits on August 31, a month earlier than initially planned. Swaps under the facility can be availed with the RBI until September 11, while the ECB and OFCB windows remain open until December 31.
CareEdge Ratings said the strong mobilisation had "augmented banking system liquidity and provided banks with greater near-term funding flexibility". It also noted the RBI’s decision to shorten the FCNR(B) deposit window as evidence of the stronger-than-expected response.