FCNR(B) deposits surge to $133 billion, creating large rupee liquidity surplus

Inflows into India's Foreign Currency Non-Resident (Bank) deposit scheme reached $132.9 billion by September 10, significantly boosting the country's foreign exchange reserves to a record $786 billion. The influx, driven by an RBI dollar swap facility that closed September 11, has created a massive rupee liquidity surplus of around Rs 10 lakh crore. In response, the Reserve Bank of India is conducting variable rate reverse repo auctions and open market sales of government securities to absorb the excess liquidity.