FCNR inflows support rupee, but FII flows vital for long-term stability: Report

Foreign currency non-resident (FCNR) inflows have significantly strengthened rupee stability and India's balance of payments position. However, experts warn that this support may not be sufficient for long-term external stability.

The report emphasises that foreign institutional investor (FII) flows will be critical as the support from FCNR inflows plateaus. India's goods deficit has reached a decade-high despite continuous support from services exports and remittances, underscoring the need for sustained capital inflows.