RBI worried over exchange rate, int'l debt as heavy foreign inflows continue

With a heavy inflow of foreign capital into the domestic markets, the Reserve Bank of India has raised concerns over the Indian rupee’s exchange rate and sustainability of the foreign debt.

In 2017 year-to-date, foreign investors' investments in debt were twice than that in equities.

Any wild movements in rupee have always been a cause of concern for the banking regulator, even though it intervenes only when the domestic currency is highly volatile.

Though the lower rupee helps India on its import bill, which is primarily dominated by oil and gold imports, but at present, since the commodities are already trading at lower levels, a falling rupee is a concern for RBI.