Looking for a sign the rupee has a sturdier safety net? According to the Reserve Bank of India's latest weekly release, reserves jumped $44.9 billion, touching $785.71 billion during the week of September 4, the highest level on record. That puts the 2026 year-to-date increase at $89.1 billion, with the jump fueled largely by cash pouring in under measures rolled out by the central bank in early June.
To tackle rupee weakness earlier this year, authorities turned to India's 35 million-strong diaspora by nudging local banks to raise foreign-currency deposits from Indians abroad. The RBI picked up the tab for currency-hedging on Foreign Currency Non-Resident deposits, a playbook it also used during the 2013 taper tantrum. The effort drew $136.38 billion in inflows, and with money arriving faster than expected, the RBI advanced the original September 30 deadline to August 31. "The gain reflects the flow of the FCNR(B) scheme," said Dilip Parmar of HDFC Securities, a currency analyst. "The RBI has been intervening in the forex markets to prop up the rupee this month."
Those inflows helped India sidestep what might have been an unprecedented third consecutive year of deficit in the country's broadest balance-of-payments gauge. The larger war chest also gives the central bank more scope to lean against rupee slides. Even so, the currency is still among Asia's laggards this year.
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After hitting a record low in May, it has clawed back about 1%, but higher oil prices remain a headwind given India's heavy reliance on imported fuel. Translation for household budgets and portfolios: a thicker reserve cushion can soften currency swings that ripple through imported goods, travel costs, and overseas investments.
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