RBI's Dollar Swap Scheme Mops Up Over $40 Billion, Bolstering Forex Reserves

The Reserve Bank of India (RBI) has successfully mobilised over $40 billion (approximately ₹3.3 lakh crore) through its concessional dollar swap facility, marking a substantial increase in the nation's foreign exchange reserves. This achievement represents a more than two-fold rise in the funds collected under the scheme within a mere fortnight, surpassing the performance of previous deposit drives.

A significant portion of these inflows has been attributed to Foreign Currency Non-Resident (Bank), or FCNR(B), deposits. The special swap facility, introduced by the central bank, aims to incentivise overseas fund mobilisation by commercial banks, thereby strengthening India's overall forex position.

The rapid accumulation of over $40 billion underscores the scheme's effectiveness in attracting foreign capital. This surge in foreign currency assets is crucial for India, providing a buffer against global economic volatilities and supporting the stability of the Indian rupee against major currencies.

A robust foreign exchange reserve position is vital for India's economic health, ensuring the country can meet its import requirements, service external debt, and maintain confidence among international investors. The increased reserves also provide the RBI with greater flexibility in managing monetary policy and intervening in currency markets if necessary.

The central bank has confirmed that this concessional dollar swap facility will remain operational and available until late 2026, accommodating various types of deposits. This extended availability is expected to continue supporting the inflow of overseas funds, further solidifying India's financial resilience in the long term.