Swap facility for dollar deposits to be available only for deposits mobilised till August 31: RBI
New Delhi, Aug 14
After witnessing an encouraging response and the resultant forex inflows, the Reserve Bank of India on Friday announced to prematurely end its swap facility for Foreign Currency Non-Resident, or FCNR, deposits.
The swap facility will now be available only for FCNR(B) deposits mobilised till August 31, 2026, the RBI said.
"Based on the encouraging response to the Swap Facility for FCNR(B) deposits and the resultant forex inflows, it has been decided that the Swap facility for FCNR(B) deposits will be available only for deposits mobilized till August 31, 2026. The Swaps under this facility i.e. FCNR(B) deposits may be availed with RBI till September 11, 2026," the Central Bank said in a statement.
Earlier this month, the RBI said its concessional foreign exchange swap facility had attracted $40.816 billion in overseas currency inflows since June when it was launched.
Foreign Currency Non-Resident (Bank) deposits accounted for the bulk of the mobilisation, according to data received from authorised dealer banks.
Total inflows under the facility stood at $40.816 billion as of July 31. FCNR (B) deposits contributed $36.725 billion to the total, while Overseas Foreign Currency Borrowings (OFCBs) accounted for $2.575 billion. External Commercial Borrowings (ECBs) brought in a further $1.516 billion.
The swap facility has seen avid interest and attracted steady forex inflows since June 8, 2026, the RBI said in a statement.
According to latest reports, India may receive FCNR (B) deposits in the range of $65-70 billion by the end of the RBI scheme on September 30, and, overall, $80-$85 billion.
Meanwhile, India's foreign exchange reserves rose sharply by $14.136 billion during the week ended August 7, crossing the $707 billion mark, driven by a significant increase in foreign currency assets and gold reserves.
The rise was led by an increase in foreign currency assets (FCAs), which constituted the largest share of the country's forex reserves. FCAs climbed by $9.946 billion to $574.625 billion during the week.
— IANS
Reader Comments
Smart policy calibration by the RBI. The swap window served its purpose – attracted record FCNR deposits and stabilized the rupee. Now they're winding it down to avoid over-dependence on such instruments. Prudent central banking, if you ask me!
As an NRI, I was planning to move some funds through this route, but looks like I'm too late now! 😅 Still, I'm glad India's forex position is strengthening. The rupee stability benefits everyone in the long run. Better to miss this window than see the economy struggle.
Interesting how quickly NRIs responded to this scheme – $40 billion in just two months shows the trust the diaspora has in India's economic management under the current government. The early closure is a sign of strength, not weakness.
As someone tracking emerging markets from the US, this is a textbook example of policy agility. The RBI set a goal, exceeded expectations, and is now adjusting course to avoid excess liquidity issues. Other central banks could learn from this approach.
While I appreciate the forex inflows, I hope RBI is careful about the short-term nature of FCNR deposits. They can reverse quickly if global conditions change. The $707 billion cushion helps, but we need sustained export growth for long-term stability.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.