RBI Governor Sanjay Malhotra Says India Can Generate More Revenue Through FX Deposits

The Reserve Bank of India expects its record foreign-currency deposit programme to generate additional income rather than become a financial burden, Governor Sanjay Malhotra said. Malhotra said the RBI can invest the dollar inflows in overseas government securities and earn interest from them. He added that the central bank had consulted major banks and other stakeholders before launching the scheme. The RBI is also closely monitoring excess rupee liquidity created by strong foreign-exchange inflows. Malhotra said tools including open market operations, currency swaps and variable reverse repo auctions remain available to absorb surplus funds. India attracted a record $127 billion from its overseas community, while combined inflows under the two foreign-currency initiatives exceeded $136 billion as of August. Malhotra also highlighted India's strong economic performance, noting that GDP grew 7.8% in the April-June quarter. He expects the upcoming festive season, including Diwali, to provide further support to consumer spending and economic growth.

Disclaimer: This image is taken from PTI.