Archive · 17 Aug 2026
SBI Research: RBI swap closure shifts focus to rupee risks
India has a big bank called the Reserve Bank of India, which takes care of the country's money.
It had a special program to bring in foreign money, but it closed that program early.
A research group called SBI Research studied this decision.
They said the cost of closing it was not the main reason.
They calculated that protecting the money would cost about $10.5 billion over five years.
That sounds like a lot, but it is only a small part of India's savings.
The rupee, which is India's money, has not changed much since the program started.
SBI Research thinks the rupee might get a little stronger soon.
They also worry about money problems in America and Japan.
These problems could affect the rupee in the future.
The Reserve Bank of India prematurely closed the special FCNR(B) swap window, shifting focus to exchange-rate management and emerging global risks, according to SBI Research.
SBI Research estimated total FCNR(B) mobilisation could reach $65-70 billion, rising to $80-85 billion when overseas foreign currency bonds and ECBs are included.
The five-year cumulative hedging cost on a $70-billion corpus is estimated at $10.5 billion, equal to 1.45% of India's current foreign exchange reserves.
The rupee appreciated just 0.1% between June 8 and August 17, and SBI Research expects it to trade in the 95-95.5 range until August 31.
SBI Research flagged global risks including the 30-year US Treasury yield rising to nearly 5.3%, its highest since 2007, and possible Japanese intervention funded through US Treasury sales.
- Who
- SBI Research and the Reserve Bank of India
- What
- The RBI prematurely closed the special FCNR(B) swap window, and SBI Research analyzed the implications for the rupee and global risks
- When
- Report released around August 17; the swap scheme began June 8
- Where
- India
- Why
- To shift focus towards exchange-rate management and emerging global risks
- FCNR(B) mobilisation estimate
- $65-70 billion
- Including bonds and ECBs
- $80-85 billion
- Five-year cumulative hedging cost
- $10.5 billion
- Current forex reserves
- ~$700 billion
- Rupee appreciation (June 8 - Aug 17)
- 0.1%
- Projected rupee range by Aug 31
- 95-95.5
- 30-year US Treasury yield
- ~5.3%, highest since 2007
- Annual reserve accumulation assumption
- ~$20 billion