Indian Banks Hike Non-Resident Deposit Rates Up to 300 Bps
Major lenders including HDFC Bank and State Bank of India have increased interest rates on foreign currency deposits by as much as 300 basis points. The move follows recent regulatory easing by the Reserve Bank of India aimed at attracting overseas capital to support the rupee.
Lenders in India raised rates on foreign currency deposits for non-resident Indians by as much as 300 basis points on Wednesday. The move follows a central bank decision to ease regulatory restrictions to attract dollar inflows. Investors are monitoring these hikes as a primary tool to stabilize the rupee, which has fallen 6% this year.
### RBI Intervention Triggers Rate Hikes The Reserve Bank of India announced on Friday it will bear the full hedging cost for three- to five-year non-resident deposits. This policy aims to encourage overseas flows and curb the weakness of the rupee, currently Asia’s second-worst-performing currency. The unit slipped to record lows in May, prompting the central bank to revisit strategies used during the 2013 taper tantrum.
