Rupee Holds Firm Despite $100 Crude: Can $136 Billion FCNR Inflows Keep Currency Strong?

The rupee has shown surprising resilience despite crude oil prices rising from around $70–72 to above $100 a barrel. A key support has been the strong response to the FCNR deposit scheme, which has attracted around $136 billion in inflows against expectations of $60–70 billion. These flows have strengthened India’s forex reserves and provided a cushion against higher crude prices. Sanjay Sinha, Founder, Citrus Advisors, says the market may be overlooking this positive development along with resilient 7.8% GDP growth and strong corporate performance. He also points to robust auto and two-wheeler demand despite elevated crude prices and concerns over a deficient monsoon.