RBI to End FCNR(B) Forex Swap Facility Early After $52.3 Billion Inflows
• The Reserve Bank of India (RBI) announced the early closure of its special forex swap facility for FCNR(B) deposits, following strong inflows of $52.3 billion. The facility will now be available only for deposits mobilized until August 31, 2026, with swaps allowed until September 11,
• Introduced in June 2026, the scheme aimed to attract non-resident Indian deposits and boost dollar inflows. The RBI's measures have significantly increased India's banking system deposits, which rose by Rs 11 trillion over three fortnights to July 31, 2026.
Impact & Risks
The early closure of the FCNR(B) facility reflects strong foreign exchange inflows, which could help stabilize the rupee and strengthen India's foreign reserves. However, the discontinuation may limit future inflows, potentially affecting liquidity. The move also underscores the importance of diversifying funding sources to mitigate risks associated with global economic uncertainties.
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