RBI faces forex risk as it tries to lure more foreign dollar inflows

Published on 7 May 2026

Banks may need RBI subsidies to take forex risk

India may need RBI backing to attract greater dollar investments amid currency exchange risk. Economists point to forex deposit schemes where the RBI could shoulder some hedging costs and potentially offer higher subsidies so banks find the yields attractive compared with global rates. The move could support foreign inflows but deepens central bank exposure to forex volatility.

RBI may support forex deposit schemes to attract more dollar inflows
Exchange risk could be shifted partly to the central bank
Higher RBI subsidies may be needed to make bank offers competitive
Global interest rates make profitability pressure more intense

#forex #interest rates #currency risk #rbi #foreign inflows

Read the full story at The Economic Times

This summarization was done by Beige for a story published on The Economic Times

RBI faces forex risk as it tries to lure more foreign dollar inflows

The full experience is on mobile.