Foreign exchange inflows mobilised under the Reserve Bank of India's special USD-INR swap facility reached $72.85 billion as of August 21, according to data released by the central bank. Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits accounted for the bulk of the funds raised under the scheme.
The RBI stated that authorised dealer banks reported $65.397 billion in inflows through FCNR(B) deposits under the facility as of August 21. This was followed by overseas foreign currency borrowings (OFCBs) at $4.86 billion and external commercial borrowings (ECBs) at $2.591 billion.
The central bank introduced the special USD-INR forex swap facility on June 8, covering inflows through FCNR(B) deposits, ECBs, and OFCBs. The facility was designed to support foreign currency inflows through these channels and strengthen the availability of foreign exchange in the domestic financial system.
Under the scheme, the window for FCNR(B) deposits remains open until August 31, while the facility for ECBs and OFCBs will remain available until December 31. The latest data show that FCNR(B) deposits have emerged as the dominant source of foreign currency mobilisation under the facility, accounting for nearly 90 per cent of total inflows reported so far.
The combined inflows from OFCBs and ECBs stood at around $7.45 billion. This strong mobilisation comes ahead of the August-end deadline for FCNR(B) deposits and highlights the significant response from banks and overseas depositors to the RBI's special forex facility.
The central bank had earlier announced that the FCNR(B) window would close on August 31, while the ECB and OFCB components would continue for a longer period. The figures provide an update on the utilisation of the facility by authorised dealer banks through August 21.
The $72.85 billion inflow under the three components represents a substantial mobilisation of foreign currency through the RBI-backed framework, with FCNR(B) deposits remaining the principal contributor.
"The substantial mobilisation of $72.85 billion through the RBI's special USD-INR swap facility highlights robust confidence and effective liquidity management within the financial system. With FCNR(B) deposits driving nearly 90 percent of these inflows, it demonstrates clear preference from overseas depositors and banks towards these instruments. For businesses and entrepreneurs operating in India, a stable and well-supported foreign exchange reserve framework provides a stronger macroeconomic foundation for long-term planning and capital deployment." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
