Weak Rupee spurs NRI bank deposits by 55%

INVESdolAs the Indian diaspora looked to seize upon the weak rupee and the interest rate differential between the US and India, deposits parked in Indian banks by NRIs grew 55% during April- September over the same period last year according to the Reserve Bank of India data.

In absolute terms deposits rose $10 billion during the six month period to $121.8 billion.

One economist said ‘an important development in the forex market has been the strengthening of the dollar which has been hastened with the expectation of the Fed increasing the interest rate causing the dollar to strengthen as funds keep flowing back to the US.

The US Federal Reserves decision to defer the rise in the interest rate may have prompted NRIs to seek higher returns offered by FCNR-B deposits giving them anything between 1.302.49% a year on dollar deposits depending on the maturities profile, while the US Federal Reserve has kept the benchmark rate at near zero per cent.