The currency opened at 94.30 against the dollar and ended at 94.48, compared with the previous session’s close of 94.97. It gave up some early gains but still strengthened sharply. A softer dollar in overseas markets and stable oil prices also supported the move.

FCNR(B), short for Foreign Currency Non-Resident (Bank), lets NRIs hold deposits in foreign currencies and earn interest. The RBI’s limited-period swap arrangement made raising overseas funds easier and cheaper for banks. From June 8 to August 31, 2026, FCNR(B) deposits attracted $127.23 billion. Total inflows across special channels, including overseas corporate borrowing, reached $136.38 billion.

Bank of Baroda economists linked the strong response to more attractive deposit pricing. Several banks raised rates on deposits with three-year and five-year tenures to 6–7%, against the usual 2–4%. Those returns encouraged Indians abroad to place funds with Indian banks.

Economists expect the inflows to strengthen foreign exchange reserves, which they believe could exceed $750 billion, and support banking-system liquidity. The eventual repayment of these deposits could increase dollar demand when they mature. However, economists consider the RBI’s buffers adequate and see a stable balance-of-payments outlook for the current financial year.