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The Economic Times

Opinion / The Economic Times

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FCNR(B): Has RBI bought forex stability at too high a cost?

The FCNR(B) scheme attracted significant foreign currency deposits for the RBI. These deposits bolstered forex reserves and stabilized the rupee's exchange rate. However, the economic benefits of these outcomes remain unclear for the nation. The scheme created substantial liquidity, necessitating costly sterilization by the central bank. This process incurred significant interest costs and exchange rate risks for the public sector.

21 Sep 2026 11:15 pm