India Leaned on NRI Deposits to Defend Rupee Amid Currency Pressure

As the Indian rupee came under pressure, India turned to Non-Resident Indian deposits as a key source of dollar inflows to stabilize the currency. NRI deposit schemes have historically served as a short-term buffer during periods of foreign exchange stress. However, economists caution that such inflows tend to be more costly and shorter in duration compared to other capital sources. Many experts now argue that India should prioritize attracting greater foreign direct investment, which offers more stable and long-term dollar inflows. FDI is widely seen as a more sustainable strategy for managing currency volatility over the long run.