RBI's Swap Facility Attracts $20.7 Billion in Forex Inflows: A Boon to India's Balance of Payments

The Reserve Bank of India's special swap facility has garnered over USD 20.7 billion in foreign exchange inflows by July 17. Announced in June to bolster India's balance of payments, the facility encourages foreign currency inflows via FCNR(B) deposits, Overseas Foreign Currency Borrowings, and External Commercial Borrowings.

In a significant development, the Reserve Bank of India's (RBI) special swap facility has attracted more than USD 20.7 billion in foreign exchange inflows by July 17. The initiative, launched in June, aims to fortify India's balance of payments by boosting foreign currency inflows.

According to the RBI's latest data, the facility covers fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, Overseas Foreign Currency Borrowings (OFCBs), and External Commercial Borrowings (ECBs). Since its operationalization on June 8, the facility has witnessed enthusiastic participation, with FCNR(B) deposits comprising the majority at USD 17.406 billion.

The bank has declared the concessional swap facility for FCNR(B) deposits will be accessible until September 30, 2026, while the arrangement for OFCBs and ECBs will persist until December 31, 2026. These measures by the RBI underscore efforts to support India's external sector by facilitating overseas currency inflows.