1 week ago
RBI Forex Swap Draws $73 Billion in Inflows
The Reserve Bank of India created a special program to bring more foreign currency into India.
The program encouraged overseas Indians and institutions to place money with Indian banks.
By August 21, the program had brought in $73 billion.
Most of this money, $65.40 billion, came through deposits made by overseas Indians.
The program began on June 8 and was designed to support India’s foreign-exchange reserves.
It also covered some types of foreign borrowing by companies and banks.
The amount raised was much larger than the $26 billion collected in a similar 2013 program.
Because the response was strong, the RBI decided to close the deposit window earlier than originally planned.
The RBI’s USD-INR forex swap facility generated $73 billion in foreign-exchange inflows by August 21.
FCNR(B) deposits accounted for $65.40 billion of the total inflows.
The facility, launched on June 8, covered FCNR(B) deposits, OFCBs and ECBs.
The inflows exceeded the approximately $26 billion raised through the RBI’s 2013 FCNR(B) swap scheme.
The RBI advanced the FCNR(B) window’s closing date to August 31 after citing an encouraging response.
- Who
- The Reserve Bank of India, the Finance Ministry, Indian banks, overseas Indians and institutional borrowers.
- What
- A special USD-INR forex swap facility generated $73 billion in foreign-exchange inflows, including $65.40 billion through FCNR(B) deposits.
- Where
- India, through the Indian banking system.
- When
- The facility was launched on June 8, and the reported inflows were measured as of August 21.
- Why
- The facility was introduced to boost dollar inflows and strengthen India’s external foreign-exchange buffers amid a weakening rupee.
Key facts
- Total inflows
- $73 billion as of August 21
- FCNR(B) inflows
- $65.40 billion
- Launch date
- June 8
- Covered instruments
- FCNR(B) deposits, Overseas Foreign Currency Borrowings and External Commercial Borrowings
- Earlier comparison
- The 2013 FCNR(B) swap scheme raised about $26 billion over roughly three months
- Revised closing date
- August 31, advanced from September 30
- Participating banks
- Indian banks raised FCNR(B) interest rates to attract deposits after the deadline was shortened
Quotes
Finance Ministry statement
Statement issued by India’s Finance Ministry about the forex swap facility
“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.”
freepressjournal.in
Sources
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