India's forex swap facility attracts USD 72.848 billion

RBI's Forex Swap Facility Initiates Significant Capital Inflows

The Reserve Bank of India (RBI) established a special USD-INR forex swap facility on June 8, 2026, designed to facilitate foreign currency inflows into the country. This mechanism permits Authorised Dealer Banks to bring in US dollar funds through specific channels, converting them into Indian rupees via a swap arrangement with the central bank.

As of August 21, 2026, the facility has attracted a total of USD 72.848 billion in foreign currency, according to data released by the RBI in a press release dated August 22, 2026. This aggregate figure reflects the initial uptake of the scheme within its operational period, contributing to India's external account management objectives.

The policy aims to provide a structured avenue for capital to enter the Indian economy, supporting broader financial stability.

FCNR(B) Deposits Dominate Inflow Composition

The total capital attracted through the facility is disaggregated across three primary instruments. Foreign Currency Non-Resident (Bank) deposits, known as FCNR(B) deposits, represent the largest component, accounting for USD 65.397 billion of the total inflows reported by Authorised Dealer Banks as of August 21, 2026.

Overseas Foreign Currency Borrowings (OFCBs) contributed USD 4.860 billion. External Commercial Borrowings (ECBs) made up the remaining USD 2.591 billion.

These figures, provided by the RBI on August 22, 2026, demonstrate a significant preference for FCNR(B) as the primary channel for utilising this swap mechanism, indicating its relative appeal to market participants compared to the other specified instruments.

Staggered Expiry Dates for Borrowing Instruments

The special USD-INR Forex Swap facility was initiated by the Reserve Bank of India on June 8, 2026. Its operational timeline varies by instrument type. For FCNR(B) deposits, the scheme is available until August 31, 2026, as previously communicated by the RBI in a press release dated August 14, 2026.

In contrast, the window for External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs) extends until December 31, 2026. This staggered expiry schedule allows for different durations of capital inflow under the facility, potentially reflecting varying market liquidity needs or policy objectives associated with each borrowing type. The approaching deadline for FCNR(B) deposits suggests a final period for these specific inflows.

Implications for India's External Account Management

The USD 72.848 billion attracted through the RBI's forex swap facility as of August 21, 2026, provides substantial liquidity to India's foreign exchange reserves and supports the stability of the Indian rupee.

This inflow, particularly the USD 65.397 billion from FCNR(B) deposits, demonstrates the effectiveness of targeted central bank interventions in managing capital account dynamics. For decision-makers, the critical date to observe next is August 31, 2026, which marks the closure of the FCNR(B) deposit window.

The final reported figures for FCNR(B) inflows after this date will reveal the full extent of capital mobilised through this specific, short-term component of the scheme, offering further insight into India's capacity to draw non-resident capital under specific incentives.