New Delhi: The Reserve Bank of India’s special USD-INR forex swap facility for FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCB), and External Commercial Borrowings (ECB), launched on June 8, has driven an unprecedented surge in foreign exchange inflows into the country to the tune US $73 billion as on August 21, according to a Finance Ministry statement on Monday.
FCNR(B) deposits alone accounted for $65.40 billion, underlining the overwhelming response of Non-Resident Indians to the scheme. The scheme’s success underscores the strength of the Indian diaspora, who have reposed faith in the Indian banking system and have once again demonstrated their enduring economic and emotional stake in India’s growth story, channelling savings into FCNR(B) deposits at a pace that has consistently exceeded expectations, the statement said.
Having reached $73 billion in under eleven weeks, with still another week to go, this stands out as the largest and fastest foreign-currency mobilisation exercise undertaken by India, comfortably surpassing the scale and pace of the RBI’s 2013 FCNR(B) swap scheme, which had raised about $26 billion over roughly three months. The response has been strong enough for the RBI to advance the closure of the FCNR(B) window itself, from September 30 to August 31, 2026, having already achieved its objective ahead of schedule, the statement said.
“By securing large-scale, long-term non-resident deposits and commercial institutional funding entirely on tap, the Government of India has fortified its external buffers with maximum cost-efficiency. This spectacular response is a testament to the fact the Indian economy, under the leadership of Prime Minister Narendra Modi, is moving from strength to strength despite unprecedented challenges in the global financial landscape,” it added.
Meanwhile, Indian banks 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.
(IANS)
