NRI Remittances Hit an All-Time High of $11.9 Billion from April to October: RBI
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New Delhi, Dec 25 (NationPress) Inflows into non-resident Indian (NRI) deposit accounts have surged to $11.9 billion in the April-October timeframe of the ongoing financial year, which is almost double the $6.1 billion recorded during the same period last year, according to the latest data released by the Reserve Bank of India (RBI).
The total NRI deposits outstanding as of October 2024 have increased to $162.7 billion, compared to $143.5 billion from the same period a year ago.
The NRI deposit schemes comprise foreign currency non-resident (FCNR) deposits, non-resident external (NRE) deposits, and non-resident ordinary (NRO) deposits.
The data indicates that FCNR (B) deposits attracted the most significant influx, amounting to $6.1 billion, nearly three times the $2.1 billion deposited in the same period last year. The cumulative total in these accounts reached $31.87 billion.
These accounts are favored by Indians working abroad as they allow for fixed deposit durations of one to five years, enabling them to secure higher interest rates. Since these accounts are held in foreign currency, they offer protection against rupee fluctuations.
The RBI recently increased the interest rate ceilings on FCNR (B) accounts in its monetary policy review earlier this month to enhance inflows and bolster the country’s foreign exchange reserves.
An uptick in foreign exchange reserves indicates strong economic fundamentals and provides the RBI with greater flexibility to stabilize the rupee during periods of volatility.
A robust foreign exchange reserve empowers the RBI to intervene in both the spot and forward currency markets by supplying additional dollars to prevent the rupee from plummeting. On the other hand, a shrinking forex reserve limits the RBI's ability to support the rupee.
The RBI's data also reveals that NRE deposits experienced an inflow of $3.09 billion during this timeframe, an increase from $1.95 billion a year prior. NRE deposits serve as a high-interest earning option for NRI remittances.
NRO deposits also saw a rise, reaching $2.66 billion during the April-October period, compared to $2 billion during the same timeframe last year.
India is leading the list of recipient nations for remittances in 2024, with an anticipated inflow of $129 billion, as per the latest data from World Bank economists.
The remittance growth rate for this year is projected at 5.8 percent, in contrast to 1.2 percent recorded in 2023, according to a blog post by the World Bank.
“The recovery of job markets in high-income nations of the Organisation for Economic Co-operation and Development (OECD) following the COVID-19 pandemic has significantly contributed to remittances. This trend is particularly evident in the United States, where employment for foreign-born workers has steadily recovered and is currently 11 percent higher than the pre-pandemic levels observed in February 2020,” the report stated.
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