Now Reading: RBI to close FCNR(B) window early after $52.3 billion inflows
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RBI to close FCNR(B) window early after $52.3 billion inflows
The Reserve Bank of India will close its special FCNR(B) deposit window on August 31, a month earlier than planned, after banks mobilised $52.3 billion by August 13. Banks can swap these…
The Story in Brief
The Reserve Bank of India will close its special FCNR(B) deposit window on August 31, a month earlier than planned, after banks mobilised $52.3 billion by August 13. Banks can swap these dollars with the RBI until September 11. The facility, launched on June 8, allows banks to bring in foreign currency and receive rupees from the central bank, with the transaction reversed at maturity.
Total inflows under the FCNR(B), overseas foreign currency borrowing and external commercial borrowing channels reached $56.9 billion. OFCBs contributed $2.8 billion and ECBs $1.7 billion. The latter two facilities will remain open until December 31, 2026. SBI mobilised about $7.3 billion through the programme, its chairman said.
The Indian Opinion
The easy claim that the scheme has solved the rupee’s weakness is premature. It has attracted substantial dollars, but the RBI is also taking much of the currency risk, while banks must deploy the rupee proceeds in suitable assets. The opposite claim, that early closure signals failure, is just as weak: FCNR(B) alone brought in $52.3 billion. The useful test is whether these funds remain stable when swaps mature and whether the rupee holds without another special window.
Sources (2): economictimes.indiatimes.com, timesofindia.indiatimes.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
