Depreciation,high interest rates draw NRI money home

While the inflow to the NRE accounts is a result of the depreciation in rupee to record levels and the deregulation by the RBI that led banks to raise interest rates on NRE deposits from 3.8 per cent to 9.5 per cent. In the month of March alone the inflow stood at 2.68 billion,again the highest monthly inflow in over a decade. On the other hand weakening global environment led to a reduced outward remittance from India.

The money remitted for investment in equity and debt abroad has also come down from 265.9million in FY11 to 239.5 million in FY12. Major slowdown came in two other areas money sent for maintenance of close relatives from 255 million in FY11 to 165 million in FY12 and for studies abroad from 150 million to 114 million.