Mecklai graph of the day: Will NRIs continue to invest?
Mecklai graph of the day: Indians working abroad have pumped in a record $4.753 billion in local bank deposits during April and May. The increase in NRI deposits is noteworthy because there has been a consistent increase in non-resident external (NRE) rupee accounts.
July 12, 2012 / 19:18 IST
Mecklai graph of the day: Will NRIs continue to invest?
Indians working abroad have pumped in a record $4.753 billion in local bank deposits during April and May. The increase in NRI deposits is noteworthy because there has been a consistent increase in non-resident external (NRE) rupee accounts, where remittances from abroad are converted into and maintained in rupees in the account.Given the weakness and volatility in the rupee, RBI had liberalized interest rates on such deposits in December last year, as one of the steps to attract foreign currency. The interest rate prevailing in India is 9% or more for one year deposits on NRE which is higher than those being offered in the USA and Europe.Though the rupee has depreciated drastically against it peers and growth remains subdued, these inflows provided some respite to the tumbling rupee preventing a further free fall in the pair.The below graph shows the NRE, FCNR, and NRO deposits with Indian banks from October 2012.
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