India’s BoP may turn surplus in FY27 as RBI measures boost foreign inflows despite CAD pressure: SBI – Firstpost

India’s current account deficit (CAD) is likely to remain in the range of 1.5-1.7 per cent of GDP in FY27, but recent measures announced by the Reserve Bank of India (RBI) could help turn the country’s overall balance of payments (BoP) into a surplus, according to a report by SBI Research.

The report said the RBI’s policy measures announced in February and June 2026 are part of a coordinated effort to stabilise the rupee, attract stable foreign capital, deepen domestic debt markets and reduce barriers to external funding.

“The RBI’s February and June 2026 measures should be viewed as a coordinated attempt to stabilise the rupee, deepen the domestic debt market, attract more stable foreign capital and reduce friction for external funding,” SBI Research said.

While India is expected to continue running a current account deficit in FY27, the report noted that the gap could be comfortably financed through fresh foreign currency inflows.

SBI Research expects these inflows to strengthen India’s foreign exchange reserves and improve the RBI’s ability to manage currency volatility. The additional inflows could also support banking system liquidity.

The report estimated that deposit growth in the banking sector could rise to around 14.5-15 per cent in FY27 against potential credit growth of 16 per cent, helping reduce the credit-deposit gap.

The RBI recently exempted fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements to encourage foreign currency inflows under the announced US dollar-rupee swap facility.

The exemption applies to fresh FCNR(B) deposits with tenors between three and five years mobilised up to September 30, 2026.

According to SBI Research, stronger capital inflows, improved forex reserves and a healthier balance of payments position could support India’s macroeconomic stability in FY27 despite continued pressure from the current account deficit.