Now Reading: RBI to close FCNR(B) swap window early after $52.3 billion inflows
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RBI to close FCNR(B) swap window early after $52.3 billion inflows
The Reserve Bank of India will close its special forex swap window for FCNR(B) deposits early after attracting $52.3 billion in foreign exchange inflows. Deposits can be mobilised until August 31, while…
The Story in Brief
The Reserve Bank of India will close its special forex swap window for FCNR(B) deposits early after attracting $52.3 billion in foreign exchange inflows. Deposits can be mobilised until August 31, while banks can access swaps against them until September 11, the RBI said. The facilities for external commercial borrowings and overseas foreign currency borrowings will remain open until December 31, 2026.
The three channels drew $56.846 billion by August 13, with FCNR(B) accounting for most of the inflows. Deposits in India’s banking system rose by Rs 11 trillion over the three fortnights to July 31, reaching a record Rs 269.4 trillion. Jefferies estimates FCNR(B) inflows could reach $80 billion to $100 billion by the facility’s original closing date.
The Indian Opinion
Claims that the facility has solved the rupee’s weakness overstate what the inflows show. The scheme has brought in dollars, but much of the money was converted into rupees and the RBI still controls the swap terms. Equally, calling it a costly failure ignores the scale of the response and the rise in bank deposits. The useful test is whether the rupee holds near current levels after the September 11 swap deadline, not whether the headline inflow crosses $80 billion.
Source: economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
