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Informist, Thursday, Aug. 27, 2026

 

MUMBAI – The Reserve Bank of India has allowed banks to access its special window for swapping dollars raised through foreign currency non-resident (banks) deposits daily, rather than once a week, dealers said. The central bank's initial guidelines for the special swap facility only allowed banks to access the window on a specific day each week.

Dealers said allowing banks to access the swap window more frequently would help accommodate large-ticket transactions and reduce operational inconvenience. "The RBI had to take in these dollars anyway. Now, it can take them in one go instead of banks having to wait for their turn, which should help smoothen the market," a dealer at a private-sector bank said.

 

The move comes just days before the deadline for mobilising deposits under the scheme ends on Monday. The swap window for these deposits will end on Sept. 11. 

 

The RBI's measures to boost foreign capital inflows have attracted $72.85 billion between Jun. 8 and Friday, of which nearly 90%, or $65.40 billion, came through the FCNR(B) deposit scheme. Market participants expect FCNR(B) inflows to exceed $85 billion by Monday, with the inflows bunched up after the central bank reduced the window for eligible deposits by a month to Aug. 31. 

 

"Big banks have been receiving a lot of inflows and have to keep these dollars idle until their turn for the swap. The minimum ticket size is $100 million," a dealer at a state-owned bank said.

 

Most banks have been using the window only when the weekly collection has been $100 million or more, another dealer said, even though the RBI allows banks to swap deposits as low as $1 million. Dealers said the RBI introduced the flexibility to access the window more frequently after large banks sought greater flexibility to offload dollars with the RBI amid strong inflows.

 

Surplus dollar liquidity in the market led to a steep rise in near-term dollar-rupee forward premiums on Thursday, one reason the RBI allowed the leeway, dealers said. The weighted average cash-tom rate Thursday rose to 6.50% from 2.08% Tuesday. The move is also expected to reduce choppy trading in the cash-tom market, dealers said.  End

 

US$1 = INR 95.54

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Divya Moolayattil

Edited by Saji George Titus

 

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