India’s foreign inward remittance jumped to $80.127 billion in 2020-21, the highest ever in a single year, according to Union Minister of State for Finance Pankaj Chaudhary. Remittances are transfers sent from one individual to another or another household.
In a written reply to a question in parliament, the minister, quoting RBI data, noted that money from abroad into India stood at $69.128 billion in 2017-18.
While the minister said a country-wise breakdown of remittances data is not compiled, he noted that the US, UAE, the UK, Singapore, and Saudi Arabia were the top five major countries from where India receives such payments.
On the rupee’s recent weakness, the minister said markets determine the value of the Indian currency. He said the Reserve Bank of India monitors the rupee’s moves and intervenes if necessary. But the minister added the RBI only intervenes to limit extreme moves in the rupee rather than to protect the currency against any preset levels.
The rupee fell sharply last year from around 74 per dollar before the Russia-Ukraine war to a record low of 83. The Ukraine crisis pushed investors to shelter in dollar-denominated assets, widely called flight-to-safety bets.
Emerging market assets took a hit, with foreign exchange reserves in several countries falling to distressed levels. Sri Lanka was the biggest hit, with the island nation experiencing its worst economic crisis on shrinking foreign currency serves and hurting its ability to import.
Pakistan is on the brink of a collapse as the country’s import cover has fallen to its lowest in a decade to just about $3 billion.
The country can finance imports for about two weeks and is amid discussions with the International Monetary Fund (IMF) for a bailout.
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