trong Response to RBI Forex Swap Facility
The Reserve Bank of India's special forex swap facility has attracted substantial foreign currency inflows as the central bank seeks to strengthen India's external financial position.
As of August 21, the facility had generated $72.85 billion in total forex inflows, according to the latest RBI data.
FCNR(B) Deposits Lead Inflows
FCNR(B) deposits have been the dominant source of foreign currency under the scheme.
Authorised dealer banks reported $65.397 billion in FCNR(B) deposits mobilised under the facility as of August 21, accounting for nearly 90% of total inflows.
The facility has helped banks attract foreign currency deposits, including funds from non-resident Indians.
OFCBs and ECBs Add to Total
Other borrowing channels also contributed to the overall inflows.
Overseas Foreign Currency Borrowings brought in approximately $4.86 billion, while External Commercial Borrowings contributed around $2.59 billion.
Facility Introduced in June
The RBI introduced the special USD-INR forex swap facility on June 8, 2026.
The scheme covered fresh FCNR(B) deposits as well as eligible ECB and OFCB inflows.
The objective was to attract foreign currency into India and strengthen the country's external financial position.
FCNR(B) Window to Close Early
The strong response to the scheme prompted the RBI to bring forward the deadline for mobilising new FCNR(B) deposits.
Banks can mobilise eligible FCNR(B) deposits under the facility until August 31, 2026, while swaps against those deposits can be undertaken with the RBI until September 11.
ECB and OFCB Window Continues
The facility covering ECB and OFCB inflows will continue separately.
The RBI has kept this window open until December 31, 2026, as previously announced.
Boost to Forex Reserves
The inflows have provided a significant boost to India's foreign exchange position.
India's forex reserves rose to $716.9 billion as of August 14, reaching a six-month high, with foreign currency assets and gold holdings both contributing to the increase.
Support for the Rupee
Stronger foreign currency inflows can provide support to the rupee by improving dollar availability in the domestic market.
The additional forex resources can also strengthen India's ability to manage external payment pressures.
RBI's Strategic Move
The RBI introduced the facility amid global economic uncertainty and concerns over India's external financing conditions.
The stronger-than-expected response meant that the central bank was able to attract substantial foreign currency earlier than anticipated, allowing it to close the FCNR(B) mobilisation window ahead of its original schedule.
Benefits for Indian Banks
Indian banks have also benefited from the improved access to foreign currency funding.
Banks have been able to raise funds through overseas debt markets, with Indian lenders raising about $12 billion through overseas debt in 2026, according to recent reports.
Conclusion
The RBI's special USD-INR forex swap facility has attracted $72.85 billion in foreign exchange inflows as of August 21, 2026.
FCNR(B) deposits accounted for the overwhelming majority of the inflows, while OFCBs and ECBs contributed additional foreign currency resources.
The strong inflows have strengthened India's forex position and provided additional support to the country's external financial stability and currency management.
