FCNR(B) deposits surge to $127.23 bn under RBI swap facility; total forex inflows $136.38 bn

Foreign currency non-resident (bank) deposits mobilised under the Reserve Bank's special forex swap facility surged to $127.23 billion by August 31, accounting for the bulk of the total $136.38 billion inflows through the scheme.

According to provisional data released by the RBI on Wednesday, authorised dealer banks reported FCNR(B) inflows of $127,226 million as of August 31.

Overseas foreign currency borrowings (OFCBs) contributed another $5.26 billion, while external commercial borrowings (ECBs) accounted for $3.89 billion.

Forex inflows through the three routes stood at $136.377 billion.

The RBI introduced the special USD-INR forex swap facility on June 8 to attract foreign currency inflows through FCNR(B) deposits, ECBs and OFCBs.

The FCNR(B) window was originally scheduled to remain open until September 30, but the central bank advanced its closure to August 31 following the strong response.

The latest data show that FCNR(B) deposits alone jumped by more than $61.8 billion between August 21 and August 31.

As of August 21, total inflows under the facility stood at $72.85 billion, with FCNR(B) deposits accounting for $65.4 billion.

The overwhelming response has taken the total inflows well above earlier expectations of around $80 billion across the three routes.

The ECB and OFCB components of the swap facility will remain open until December 31, 2026.

The RBI said the latest figures are provisional and pending final reporting, accounting and reconciliation.

The large inflows give Indian banks access to substantial foreign currency resources and add to the country's external buffers at a time when the central bank has been managing volatility in the rupee.