Politics · India Bureau
RBI's forex swap scheme attracts $136 billion in foreign inflows
The Reserve Bank of India's foreign currency swap window has drawn substantial inflows, with FCNR(B) deposits dominating the fundraising effort. The facility has emerged as a key instrument for managing India's external account requirements.
LSN India ·
The RBI's forex swap window has attracted $136.37 billion in total inflows, underscoring strong overseas investor interest in Indian currency assets. The facility, designed to help boost India's foreign exchange reserves and manage liquidity, has become an important tool in the central bank's external finance management arsenal.
Foreign Currency Non-Resident (FCNR) deposits formed the cornerstone of the inflows, accounting for $127.22 billion of the total. These deposits from non-resident Indians and foreign investors represent the dominant source of foreign currency raising through the swap mechanism.
Overseas foreign currency borrowings contributed $5.26 billion to the total, while External Commercial Borrowings (ECBs) added $3.89 billion. The diversified composition of inflows reflects various channels through which foreign currency enters the Indian financial system.
The substantial response to the RBI's swap facility indicates continued confidence in India's macroeconomic fundamentals and the rupee's stability. The inflows help strengthen India's forex reserves, which serve as a critical buffer against external vulnerabilities and support the currency during periods of market volatility.