India has received $7 billion as FIIs since the government announced measures announced to bring foreign inflows and boost the rupee, according to a report by SBI Research.
The Indian currency has appreciated around 2.2% till June end from its lowest level of Rs 96.8 against US dollar on May 20, 2026.
Last month, the government and the Reserve Bank of India introduced a set of measures with the aim to boost foreign inflows and boost rupee as crude prices rose due to the Middle East conflict. Some of the measures include exemption of FIIS and FPIs from tax on sovereign bonds, subsidised hedging costs on FCNR(B) deposits, concessional dollar-swap window for PSU loans and more.
However, latest geo-political tensions have again put upward pressure on the exchange rate. These tensions escalated after the US President announced the end of the US-Iran ceasefire that has oushed Brent crude price and depreciation in the rupee (-0.4%).
Despite this, the outlook remains positive with average crude oil price for Indian basket now expected at $80 billion or lower leading to savings of at least $30 to $35 billion in oil import bill against our previous estimate when oil price had crossed $130 per barrel, the report said.
The deposits in the banking system has surged by around Rs 7 lakh crore during the fortnight ended June 30, 2026, resulting in the third-highest fortnightly growth in 29 years, the report said. This surge comes primarily due to FCNR (B), portfolio flows, ECB, with capital flows estimated to be around $15 billion.
Meanwhile, the Reserve Bank of India’s foreign currency reserves increased by $4.4 billion during the fortnight, while commercial paper (CP) issuances and incremental bank credit increased in the first quarter of FY27. CP issuances rose in Q1FY27, with June issuances hitting a 55-month high, while incremental bank credit rose to Rs 5.6 lakh crore in Q1FY27 compared with Rs 2.4 lakh crore in the corresponding period last year.
According to SBI Research, the top sectors with higher CP issuances also recorded stronger bank credit growth and accounted for around 69% of new project announcements in Q1FY27. It further mentioned that banks had been borrowing through certificates of deposit (CDs), however this trend is expected to reverse. Additionally, the record Rs 7 lakh crore deposit accretion during the fortnight ended June 30, liquidity is likely to become more comfortable.
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