Rupee liquidity and dollar borrowings

In the financial year 2018-19, FPI investors withdrew a net of $6 billion. By contrast, FPIs have brought in net investments of $5 billion in 2019-20 till July 25

Indian economic growth slowed down to 5.8 per cent in the last quarter of 2018-19. The decline in the sale of vehicles and consumer durables, and other negative indications point to a continuing slowing down of growth in the first quarter of 2019-20. In this environment, the RBI (Reserve Bank of India) may well feel the need to do its bit to jump-start the economy by pushing up lending.

To achieve this, the RBI sought and received $5.02 billion from market intermediaries in exchange for Rs 34,561 crore on March 28, 2019. The RBI accepted another $5 billion for Rs