Now Reading: RBI’s FCNR swap attracts $56.8 billion till August 13
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RBI’s FCNR swap attracts $56.8 billion till August 13
India's special forex swap window for FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings has drawn $56.85 billion as of August 13, the Reserve Bank of India said. FCNR(B)…
The Story in Brief
India's special forex swap window for FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings has drawn $56.85 billion as of August 13, the Reserve Bank of India said. FCNR(B) deposits alone brought in $52.3 billion. The window for such deposits will close on August 31, while ECB and OFCB facilities remain open till December 31.
The inflows have pushed total bank deposits up 11 trillion rupees ($115.25 billion) over three fortnights to a record 269.4 trillion rupees by July 31, RBI data shows. India's forex reserves rose $14.14 billion to $707 billion in the week ended August 7. CareEdge estimates total capital inflows from all swap measures could reach $90-95 billion in FY27, helping balance of payments swing to a $64 billion surplus.
The Indian Opinion
The flood of FCNR dollars is being hailed as a policy triumph, but the story is more nuanced. These are not permanent reserves, they carry swap costs and will eventually exit, creating future dollar demand. The RBI has already had to deploy VRRR and OMO sales to absorb the rupee liquidity generated. Meanwhile, some foreign banks are offering up to 29x leverage to FCNR depositors, raising a familiar offshore-borrowing cycle risk. The real test: will deposit growth stay strong after the swap window shuts on August 31, or will the one-off surge leave an artificial high-water mark?
Sources (4): economictimes.indiatimes.com, timesofindia.indiatimes.com, economictimes.indiatimes.com (2), rbi.org.in
This story was synthesised by AI from the 4 sources linked above.
Updated: this story now draws on 4 sources.
