Now Reading: RBI Ends FCNR(B) Dollar Window Early After $56.85 Billion Inflows
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RBI Ends FCNR(B) Dollar Window Early After $56.85 Billion Inflows
The Reserve Bank of India will accept deposits under its special FCNR(B) swap facility only until August 31, 2026, after banks raised $56.85 billion in foreign-currency inflows in 67 days. Banks can…
The Story in Brief
The Reserve Bank of India will accept deposits under its special FCNR(B) swap facility only until August 31, 2026, after banks raised $56.85 billion in foreign-currency inflows in 67 days. Banks can complete the related swaps with the RBI until September 11. The facility had earlier been scheduled to run until the end of September.
According to Mint, FCNR(B) deposits accounted for $52.3 billion of the total, while overseas foreign-currency borrowings contributed $2.81 billion and external commercial borrowings $1.74 billion. The RBI will keep the other two channels open until December 31, 2026. Mint quoted analysts warning that the inflows could create excess rupee liquidity and add to inflation risks.
The Indian Opinion
Claims that the scheme was either an effortless victory or an expensive mistake are both too simple. It helped bring dollars into India, but the RBI must also manage the cost of its swaps and where banks deploy the funds. The key test is whether foreign-exchange stability lasts without an unwanted rise in rupee liquidity or inflation. Future data on liquidity and prices will show whether the trade-off was worth it.
Sources (2): ndtvprofit.com, livemint.com
This story was synthesised by AI from the 2 sources linked above.
