FCNR has bought time; now let's transform how we finance our current account deficit: Neelkanth Mishra

What happened: Neelkanth Mishra, World Bank Group executive director, said record FCNR dollar inflows give India about a year or two to shield the economy from external volatility and pursue structural reforms in how the current account deficit is financed. Key numbers: $127 billion in FCNR Why it matters: Mishra said the FCNR window, closed on 31 August a month early as inflows exceeded expectations, should be used for structural shifts rather than sharp rupee moves, and cautioned that weaker EM capital flows stem from high fiscal debt-to-GDP and cost of capital, not only AI investment.

Neelkanth Mishra, World Bank Group executive director, said record FCNR dollar inflows give India about a year or two to shield the economy from external volatility and pursue structural reforms in how the current account deficit is financed.

Mishra said the FCNR window, closed on 31 August a month early as inflows exceeded expectations, should be used for structural shifts rather than sharp rupee moves, and cautioned that weaker EM capital flows stem from high fiscal debt-to-GDP and cost of capital, not only AI investment.