New Delhi, Aug 22 (IANS) The Research Bank of India (RBI) on Saturday said that authorised dealer banks have raised a massive $72.848 billion in forex inflows till August 21, and a major chuck came from FCNR (B) deposits at $65.397 billion.
External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs) under Reserve Bank’s Swap facility helped raised another $7.451 billion till August 21.
RBI had introduced a special USD-INR forex swap facility covering FCNR(B) deposits, ECB and OFCB inflows on June 8, 2026.
“As already announced vide Press Release dated August 14, 2026, the Scheme is open till August 31, 2026 for FCNR(B) deposits, and up to December 31, 2026 for ECBs and OFCBs,” The Research Bank said in a statement.
The massive foreign inflows arrive as Indian banks have stepped up their efforts to attract FCNR(B) deposits by offering higher interest rates after the Reserve Bank of India (RBI) suddenly cut short the deadline for its dollar-rupee swap window to August 31, from September 30.
The swap facility, announced in June to boost the inflow of dollars amid a weakening rupee, was originally available until the end of September, but the RBI abruptly shortened this by a month due to the “encouraging response” to the facility, which resulted in the required amount of foreign exchange flowing into the country.
While there may be valid reasons to justify an early closure of the RBI’s FCNR(B) deposit scheme, the most likely reason could be that the target for dollar mobilisation has already been achieved with inflows at $57 billion, and another $25-30 billion could easily flow in the remaining days of August, taking the total collections to around $85 billion, an SBI Research report said earlier this week.
According to the SBI report, “we don’t believe that the cost of swap could have been a constraining factor”.
“Our estimates show that the cumulative cost would amount to around 15 per cent of the corpus, or $10.5 billion. While this appears sizeable in absolute terms, it needs to be viewed against the scale of India’s foreign-exchange reserves rather than the FCNR(B) corpus alone,” the report argued.
Meanwhile, foreign exchange reserves jumped $9.905 billion to $716.90 billion during the week ended August 14, according to data released by the Reserve Bank of India (RBI) on Friday. The latest increase comes a week after the country’s forex reserves had surged by $14.1 billion to $707 billion, marking their highest level in the current financial year.
The rise in reserves was supported by inflows under the RBI’s FCNR(B) deposit scheme, which began to reflect in the country’s foreign exchange reserves.
–IANS
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