India's central bank has made a significant policy change to stabilize the declining rupee. Banks are now allowed to increase interest rates on deposits from non-resident Indians.

This move aims to attract foreign exchange inflows, which are crucial for strengthening the currency in the face of global economic challenges. The rupee has been experiencing a series of declines, leading the central bank to use its foreign-exchange reserves to mitigate the depreciation.

By offering higher deposit rates to Indians living abroad, the central bank hopes to encourage remittances and investments, thereby supporting the rupee's value in the foreign exchange market.