India's foreign exchange reserves up almost $50 billion since July

Kolkata: India's foreign exchange reserves surged by nearly $50 billion since July as inflows swelled into the banks' foreign currency non-resident bank (FCNR-B) following the Reserve Bank of India's measures to attract dollars.

The forex stockpile rose $9.905 billion in the week to August 14 taking the kitty to $716.90 billion, RBI data showed, marking the seven consecutive weekly rise.

The country's forex stockpile jumped by $49.975 billion in the past seven weeks as inflows poured into FCNR-B deposits of local banks.


Foreign currency assets, the largest component of the reserves, rose $7.2 billion to $581.85 billion, making the biggest contribution to the overall increase. Meanwhile, gold reserves surged by $2.67 billion to $111.41 billion, providing another significant boost.

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Indian banks have received about $53 billion through the special FCNR-B deposit mobilisation scheme till August 14 while another $4.5 billion through external commercial borrowing (ECB) and overseas foreign currency borrowing (OFCB) by banks, RBI data showed. Governor Sanjay Malhota said that the central bank is anticipating around $80 billion inflows.

The RBI has advanced the scheme deadline a month to August 31 since the inflows were more than anticipated. The swap window for FCNR-B deposits will remain open till September 11. The scheme for ECBs and OFCBs will continue to be open till December 31, 2026, as announced earlier.

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The swap, whereby RBI absorbs the annual 280–300 basis point hedging cost for banks, helped the central bank raise its foreign currency assets, people aware said.