The Reserve Bank of India (RBI) on Monday operationalized a new dollar-rupee swap window aimed at attracting foreign currency inflows and supporting the rupee. The facility covers foreign currency non-resident (FCNR) deposits and external commercial borrowings (ECBs), allowing banks to swap fresh FCNR deposits at par and PSU ECBs at 1.5%, according to livemint.com and bfsi.economictimes.indiatimes.com.
The swap window was announced by RBI governor Sanjay Malhotra in the recent monetary policy and detailed operational guidelines were issued on Monday. Under the FCNR(B) scheme, banks can access the swap facility for fresh foreign currency non-resident deposits mobilized from abroad. The ECB swap facility targets public sector undertakings, enabling them to swap ECBs at a concessional rate of 1.5%, per bfsi.economictimes.indiatimes.com.
Market participants expect these measures to bring in $40–50 billion in foreign currency inflows during the fiscal year 2026-27, which could help stabilize the rupee amid global volatility. The swap window aims to reduce hedging costs for banks and companies, enhancing the attractiveness of long-term foreign currency deposits and borrowings. This initiative follows RBI’s broader efforts to maintain currency stability and support external sector resilience, as reported by livemint.com.
The RBI’s new swap window became operational on Monday, June 8, 2026, marking a significant step in its foreign exchange management strategy. The central bank’s move is expected to influence the foreign exchange market dynamics throughout the fiscal year, with the next monetary policy review scheduled for August 2026, when the impact of these measures will be assessed.