The sharpest hike was effected in the maturity bucket of one year to less than two years in the US dollar category, which will now yield 2.85% per annum. Dollar deposits maturing in two years to less than three years will now earn 3%, 85 bps higher than before, while those maturing in three years to less than four years will yield 80 bps higher at 3.1%. The maturity bucket of four years to less than five years will earn 80 bps more at 3.15% and five-year dollar deposits will yield 3.25%, 80 bps higher than earlier.
Rates on one-year deposits denominated in pound sterling were raised 25 bps to 2%, in Canadian dollar by 50 bps to 2.3%, in Australian dollars by 50 bps to 1.2%. Interest rates on all deposits denominated in euro and Japanese yen remained unchanged.
In order to slow down the depreciation in the rupee, the RBI announced a series of measures last week aimed at attracting stronger forex inflows. Among the measures was a limited-period exemption of incremental FCNR(B) and non-resident (external) rupee (NRE) deposits with a reference base date of July 1, 2022 from the maintenance of cash reserve ratio and statutory liquidity ratio. This relaxation will be available for deposits mobilised up to November 4, 2022.
The cap on interest rates on such deposits was removed with effect from July 7 and up to October 31, 2022. Earlier, interest rates on FCNR(B) deposits were subject to ceilings of overnight alternative reference rate (ARR) for the respective currency/swap plus 250 bps for deposits with maturities between one year and less than three years. For deposits maturing in three years to five years, the rates were capped at overnight ARR plus 350 bps.