Mumbai: The Reserve Bank of India (RBI) on Monday operationalized the foreign currency liquidity measures announced by governor Sanjay Malhotra in Friday’s monetary policy, introducing special dollar-rupee swap facilities for foreign currency non-resident (FCNR) deposits and external commercial borrowings (ECBs) to encourage inflows and support the rupee.
Under the FCNR(B) scheme, banks can access a US dollar-rupee swap facility for fresh foreign currency non-resident deposits mobilized for a tenor of three to five years. The facility will be available only in US dollars, regardless of the currency in which deposits are raised.
Banks will be able to swap dollars with the RBI at par—exchanging dollars for rupees today and reversing the transaction at the same exchange rate at maturity. The window will be open for deposits mobilized until 30 September 2026, while the swap facility will remain available until 16 October 2026.
Swap facility introduced
Separately, the RBI introduced a swap facility for eligible ECBs raised by public sector companies and overseas foreign currency borrowings (OFCBs) raised by banks. These will cover borrowings with an average maturity of three years and above drawn until 31 December 2026, as well as OFCBs raised by banks with a minimum three-year tenor.
Under this facility, banks can sell US dollars to the central bank and agree to buy them back at the end of the swap period. Unlike the FCNR scheme, the ECB/OFCB facility will carry a fixed swap cost of 1.5% per annum, compounded semi-annually, with the maximum tenor linked to the borrowing maturity, subject to a five-year cap.
The RBI also allowed authorized dealer banks to exclude swap positions arising from FCNR(B) deposits, ECBs and OFCBs from their net overnight open position (NOP-INR) calculations, easing regulatory constraints on participation.
The measures are aimed at attracting durable foreign currency inflows, reducing hedging costs for borrowers and banks, and strengthening external buffers amid heightened global uncertainty.
Market participants expect the combined impact of the moves to bring in $40–50 billion in FY27, which could support the rupee.
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