India gets $72.8 billion in dollar inflows under RBI swap facility
India has received $72.8 billion in dollar inflows through FCNR(B) deposits, external commercial borrowings and overseas foreign currency borrowings under the RBI’s special swap facility as of August 21.
In a surprise move last week, the RBI had curtailed the timeline for banks to accept FCNR (B) deposits to August 31 from the earlier annouced September 30 due to the strong inflows.
India has received dollar inflows of $72.8 billon under special swap facility foreign currency non resident (bank) FCNR (B), external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs) until August 21, Reserve Bank of India (RBI) said on Saturday.
FCNR (B) deposits make up a majority of the inflows at $65.39 billion, the data showed.
Dollar inflows from OFCBs and ECBs remained modest at $4.86 billion and $2.59 billion, the data showed.
Banks added another $13 billion through the FCNR (B) window in the last one week, up from the $52.30 billion the central bank had received until August 13, the latest RBI update showed.
In a surprise move last week, the RBI had curtailed the timeline for banks to accept FCNR (B) deposits to August 31 from the earlier annouced September 30 due to the strong inflows.
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However, the swap scheme for ECBs and overseas foreign currency borrowings OFCBs will continue until December 31, 2026, as originally planned.
The facility, operationalised on June 8 to boost dollar inflows and strengthen foreign exchange reserves, allows banks to swap eligible overseas borrowings with the central bank at concessional rates, significantly lowering their cost of funds. Banks can swap FCNR(B) with the RBI under a zero-cost hedging facility available until September 11.
Inflows through the FCNR(B) scheme have exceeded the $26 billion mobilised under a similar scheme in 2013, less than three months after the latest window opened on June 8.
The scheme has helped swell the foreign exchange reserves. India's foreign exchange reserves surged by nearly $50 billion since July. Latest data shows that the forex stockpile has risen for seven consecutive weeks. It rose $9.905 billion in the week to August 14 taking the kitty to $716.90 billion, RBI data showed.
