The Reserve Bank of India’s special USD-INR forex swap facility has mobilised $73 billion in foreign exchange inflows in just under 11 weeks, with foreign currency non-resident (bank) deposits accounting for $65.4 billion, the finance ministry said. The facility was launched on June 8 to attract FCNR(B) deposits and overseas foreign currency inflows.
The forex swap facility was introduced to bolster foreign currency reserves amid global market volatility. It allows authorised banks to accept term deposits from non-resident Indians in permitted foreign currencies. The finance ministry highlighted that the majority of the $73 billion inflows came through FCNR(B) deposits, reflecting strong participation from overseas Indians.
This capital inflow significantly strengthens India’s foreign currency buffers, providing crucial support to the banking system. The $73 billion mobilisation through the RBI’s forex swap facility is a substantial addition compared to previous inflows, helping to stabilise the rupee and manage external vulnerabilities. The facility’s success underscores the importance of targeted measures to attract foreign currency deposits.
The RBI’s forex swap facility has now been active for nearly 11 weeks since its June 8 launch, with the finance ministry confirming the $73 billion inflow figure today. The substantial $65.4 billion from FCNR(B) deposits highlights the continuing role of non-resident Indians in supporting India’s foreign exchange reserves.