An article in the Reserve Bank of India’s (RBI) October Bulletin described firm activity in industry and services alongside rising inflation risks tied to geopolitical tensions in West Asia and supply disruptions.
The RBI released the issue Friday, Oct. 23. It said faster-moving indicators showed strength in the two sectors. Consumer Price Index (CPI) inflation rose modestly in September, with food, fuel and core categories all recording increases. The authors also cited borrowing costs in developed markets and broader fiscal and financial-stability risks.
Merchandise shipments recorded double-digit growth in the first half of fiscal 2026-27, according to the bulletin.
In August 2026, foreign direct investment, external commercial borrowings and remittance flows all strengthened, according to the bulletin. It also said the FCNR(B) swap window added to reserves.
The Finance Ministry said the RBI’s special dollar-rupee swap facility, launched June 8, had mobilized $73 billion by Aug. 21, including $65.4 billion in FCNR(B) deposits. The RBI moved the window’s closing date forward to Aug. 31 from Sept. 30. The ministry compared the program with a 2013 FCNR(B) swap effort that raised about $26 billion over roughly three months.
PTI reported that the rupee had a depreciating bias from late September as the U.S. dollar strengthened and crude prices rose. PTI said the currency appreciated in mid-October, linking the rise to RBI measures and a softer dollar.
A separate RBI circular dated Oct. 10 requires authorized dealers to hold a cash Foreign Exchange Risk Reserve equal to 20% of the rupee equivalent of qualifying INR-linked derivatives above $2 million. It covers specified current-account hedges in which a user buys foreign currency against the rupee.
The authors of the bulletin’s “State of the Economy” article wrote, “Navigating this environment, the Indian economy has been anchored by solid macroeconomic fundamentals and policy interventions to cushion downside risks.” The RBI says views in bulletin articles belong to their authors and do not represent the central bank.
