RBI Governor describes rupee as the most stable currency among major currencies within a range

Mumbai, April 5, (IANS) The Indian rupee (INR) has been stable compared to other currencies during 2023-24, according to RBI Governor Shaktikanta Das. The INR depreciated only 1.4% against the US dollar, lower than many emerging market peers and some advanced economies.

Das highlighted that India’s strong macroeconomic fundamentals and high foreign exchange reserves of $645.6 billion have contributed to the stability of the INR. External vulnerability indicators show improved resilience in India’s external sector, boosting confidence in meeting external financing requirements comfortably.

The current account deficit (CAD) narrowed significantly in the first three quarters of 2023-24, driven by lower merchandise trade deficit, robust services exports, and strong remittances. India remains the largest recipient of remittances worldwide, with a lower cost of receiving at 4.9% in Q3:2023.

Despite a moderation in net foreign direct investment (FDI) to $14.2 billion in April-January 2023-24, net foreign portfolio investment (FPI) saw a turnaround with $41.6 billion inflow. External commercial borrowings (ECBs) and non-resident deposits also recorded higher net inflows, showcasing improved external financing dynamics.

India’s external debt/GDP ratio decreased to 18.7% at end-December 2023, and the net International Investment position to GDP ratio improved as well. The country saw notable growth in ECB agreements compared to the previous year, signaling positive trends in foreign investments.