FCNR(B) accounts allow Non-Resident Indians to maintain fixed deposits in foreign currencies like the US Dollar. They offer tax-free returns and full repatriability, making them essential instruments for the RBI to manage forex reserves and ensure rupee stability.
Click to View MoreThe Indian Rupee has faced significant depreciation due to surging crude oil prices and foreign capital flight. To curb volatility and imported inflation, the RBI has actively intervened using spot dollar sales, forex swaps, and regulatory measures without targeting a fixed exchange rate.
Click to View MoreThe Reserve Bank of India has recently issued a directive to state-owned oil marketing companies to limit their purchase of US dollars from the spot market. Oil refiners are among the largest consumers of foreign exchange in India, and their sudden, large-scale dollar requirements can lead to significant volatility in the exchange rate. By shifting these transactions away from the immediate spot market, the central bank aims to stabilize the Indian rupee and manage the country's foreign exchange reserves more effectively.
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