India presses banks to court diaspora’s deposits as rupee weakens

India’s finance ministry is urging state-owned banks to attract more foreign-currency deposits from the overseas diaspora to support the rupee, which has fallen more than 6% against the dollar this year. The move follows Reserve Bank of India steps to boost inflows, including subsidising hedging costs on medium-term foreign currency deposits and allowing higher deposit rates for Indians abroad. Economists say the measures could bring in as much as $60bn, helping stabilise the currency as India faces higher oil-import costs from the Iran war, which has also cut foreign exchange reserves by $54bn since the conflict began. The article also notes rising inflation, a weak monsoon and expectations that the RBI may soon begin an interest-rate hiking cycle. Overall, the policy response is supportive for the rupee but reflects growing macro pressure and near-term downside risk for the currency.