Summary:
RBI’s forex swap facility has mobilised $73 billion in less than 11 weeks, with FCNR(B) deposits contributing $65.4 billion. The strong inflows have strengthened India’s foreign-currency buffers, while the RBI has largely absorbed the dollars into its reserves, limiting their impact on the rupee.
The Reserve Bank of India’s (RBI) special USD-INR forex swap facility has mobilised $73 billion in foreign exchange inflows in less than 11 weeks, strengthening India’s foreign-currency buffers amid heightened global financial market volatility. The facility, launched on June 8, 2026, covers Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, Overseas Foreign Currency Borrowings (OFCBs) and External Commercial Borrowings (ECBs). The latest mobilisation was reported as of August 21.
FCNR(B) Deposits Account for Bulk of Inflows
FCNR(B) deposits emerged as the biggest contributor, accounting for $65.4 billion of the total $73 billion mobilisation. OFCBs contributed around $4.86 billion, while ECBs accounted for approximately $2.59 billion. FCNR(B) accounts are term deposits maintained by NRIs with authorised banks in permitted foreign currencies, allowing depositors to hold and repatriate their savings in foreign currency without taking direct rupee exchange-rate exposure.
The strong response from NRIs and overseas depositors highlights continued confidence in India’s banking system and economic growth prospects. The facility was designed to attract large-scale, relatively long-term foreign-currency resources and strengthen the external sector by making additional foreign-currency funding available to banks and corporates.
Recent News: RBI Keeps FCNR(B) Window on Schedule as Foreign Currency Inflows Surge to $40.8 Billion
RBI Closes FCNR(B) Window Ahead of Schedule
The pace of mobilisation was significantly stronger than anticipated, prompting the RBI to advance the closure of the FCNR(B) swap window to August 31 from the earlier September 30 deadline. The ECB and OFCB component of the facility remains available until December 31, 2026.
The latest mobilisation has also surpassed the RBI’s landmark 2013 FCNR(B) swap scheme, which attracted around $26 billion over nearly three months. At $73 billion in less than 11 weeks, the current programme has therefore mobilised nearly three times the amount raised through the earlier scheme.
Why the Forex Inflows Matter for India
The large inflow provides the banking system with additional foreign-currency resources and strengthens India’s external buffers at a time when global markets remain volatile. The build-up also improves the RBI’s ability to manage periods of pressure on the rupee and meet foreign-currency funding requirements.
However, the inflows have not translated into a sharp appreciation in the rupee because the RBI has largely absorbed the incoming dollars into its foreign-exchange reserves rather than releasing them directly into the spot market. The rupee was around ₹95.71 per dollar when the scheme began on June 8 and remained around the same level by August 21.
