Politics · India Bureau
RBI forex swap scheme draws $143.5 billion in inflows
The Reserve Bank of India's concessional forex swap facility has attracted substantial inflows, with the scheme crossing the $143.5 billion mark by mid-September. Foreign currency non-resident account deposits dominate the inflows, accounting for nearly $133 billion of the total.
LSN India ·
The RBI's forex swap window, designed to ease dollar liquidity pressures in the financial system, has proven a major success in mobilizing external resources. By September 18, cumulative inflows through the facility had reached $143.5 billion, reflecting strong participation from overseas investors and non-resident account holders seeking rupee liquidity.
Foreign Currency Non-Resident (FCNR(B)) deposits have been the primary driver of the scheme's appeal, accounting for approximately $133 billion of total inflows. These deposits allow non-residents to hold funds in specified foreign currencies while earning interest, making them an attractive option amid volatile global markets and shifting interest rate cycles.
The robust response to the RBI's swap facility underscores continued confidence in India's financial stability and the central bank's liquidity management tools. The scheme has effectively channeled external resources into the domestic financial system, supporting rupee stability and providing banks with additional forex buffers during a period of significant global economic uncertainty.
The facility demonstrates the RBI's proactive approach to managing external sector dynamics and maintaining adequate foreign exchange reserves. Strong inflows through both the swap window and FCNR(B) deposits have helped bolster India's external financing position amid capital flow volatility.