To stabilise the falling Rupee, a few measures have been taken, one of them is the Reserve Bank of India quietly dusting off a tool it last used during one of the most turbulent periods for the Rupee.
The RBI is trying to attract billions of dollars from Non-Resident Indians (NRIs).
Why?
Because India needs dollars.
The Problem
The lowest value of the Indian Rupee against the US Dollar occurred in May 2026, when $1 briefly traded around ₹97.
That means ₹1 was worth only about 1.03 US cents, the weakest level in post-independence history. Over the last few months, several factors have put pressure on the Rupee:
- Higher crude oil prices
- Rising import bills
- Foreign investor outflows
- Concerns about a widening trade deficit
When India imports more than it exports, more dollars leave the country than come in.
And when demand for dollars exceeds supply, the Rupee weakens.
What Has RBI Done?
The RBI has introduced a concessional swap facility for banks raising foreign currency deposits from NRIs through FCNR (Foreign Currency Non-Resident) accounts.
Sounds complicated.
Here’s the simple version:
The RBI wants overseas Indians to bring more dollars into India.
To make that happen, it is eliminating the the currency-hedging costs that banks would normally incur when accepting those foreign-currency deposits. The cost is being borne by the Reserve Bank. The RBI is making it easier and more attractive for banks to mobilise NRI dollars.
In other words, banks in India can market foreign currency deposits, and when the time comes that the deposits mature and they have to pay back the dollars, they can simply buy from the RBI, no matter what the rate is between INR and USD at that time. The risk of currency fluctuation is not on the banks, its being borne by the RBI.
Why Is This Important?
Many people assume the RBI can simply defend the Rupee by selling dollars from its foreign exchange reserves.
But that’s only a temporary solution.
Think of it like this:
Selling dollars from reserves is like spending money from your savings account.
Eventually, those savings run down.
What India really needs is fresh dollar inflows.
That’s where NRI deposits come in.
Instead of using existing reserves, the RBI is trying to bring new dollars into the system.
A Lesson From 2013
This strategy isn’t new.
In 2013, during the “Taper Tantrum,” emerging markets faced severe currency pressure after the US Federal Reserve signalled a reduction in monetary stimulus.
The Rupee came under intense pressure.
The RBI responded by encouraging NRIs to make FCNR deposits.
The result?
Billions of dollars flowed into India and helped stabilise the currency.
Today, the RBI appears to be reaching for the same playbook.
How Much Money Could Come In?
Market estimates suggest the scheme could attract between $35 billion and $40 billion, with some projections reaching $50 billion if participation is strong.
That’s a meaningful amount of foreign exchange support.
Will This Save The Rupee?
It can certainly help.
More dollar inflows increase the supply of foreign currency, reduce pressure on the Rupee, and provide confidence to markets.
But it does not solve the underlying issues.
If..
- Oil prices remain elevated,
- Imports continue to rise,
- Inflation picks up,
- Or foreign investors continue withdrawing capital,
Then the pressure on the Rupee may persist.
The Bigger Picture
The RBI can print Rupees.
It cannot print Dollars.
Which is why attracting foreign currency into the country becomes critical during periods of external stress.
The latest move is not just about NRI deposits.
It’s about ensuring India has sufficient foreign exchange reserves to fund imports, support the Rupee, and maintain confidence in the economy.
And that makes this one of the most important policy moves investors should be paying attention to right now.
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