RBI's Foreign Currency Inflows Through FCNR(B) Deposits Attract $65 Billion Ahead of Aug 31 Deadline

The Reserve Bank of India's measures to increase foreign currency inflows have attracted $65 billion ahead of the August 31 deadline for the RBI's concessional swap window. This has increased the total foreign currency inflows to $72 billion, RBI said in a notification on Saturday.

The RBI has introduced a US dollar-rupee forex swap facility for fresh Foreign Currency Non-Resident deposits mobilized by banks, applicable to tenors of three to five years. The move is part of India’s strategy to attract longer-duration foreign currency inflows and strengthen its external financing position amid global uncertainty.

Foreign currency inflows through external commercial borrowings (ECBs) have reached $2.6 billion, while overseas foreign currency borrowings (OFCBs) have contributed another $4.9 billion, RBI said.

The concessional swap window for FCNR-B deposits was initially scheduled to remain open until the end of September. However, the RBI last week advanced the deadline to August 31, citing an encouraging response from market participants.

The decision to advance the deadline followed consultations with policymakers and was part of the RBI’s broader external sector management strategy.

The concessional swap facility is a policy intervention aimed at improving foreign exchange reserves and supporting overall financial stability during periods of global uncertainty.