Summary of this article
RBI sees no proposal to end forex swap scheme early.
Nearly USD 41 billion mobilised through special foreign currency schemes.
RBI expects steady inflows despite ongoing global geopolitical uncertainties.
The Reserve Bank of India (RBI) has no proposal at present to close its concessional foreign exchange swap scheme before its scheduled timeline, Governor Sanjay Malhotra said on August 5, 2026, indicating that the central bank expects the facility to continue attracting foreign currency inflows. After the RBI's monetary policy committee (MPC) announcement, Malhotra said that the scheme has already received robust inflows and is expected to continue drawing funds in the coming months.
Nearly $41 Billion Raised So Far
The RBI introduced the concessional forex swap facility in early June in sync with measures announced by the government to encourage foreign currency inflows at a time when the Indian rupee was under pressure against the dollar.
According to the RBI, the schemes have mobilised nearly $41 billion so far. This includes $36.725 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits from non-resident Indians (NRIs), $2.50 billion through overseas foreign currency borrowings, and $1.50 billion through external commercial borrowings.
The FCNR(B) deposit scheme will remain open until September, while the facilities for overseas foreign currency borrowings and external commercial borrowings will continue until December. Under the scheme, the RBI is also bearing the cost of currency hedging.
Rupee Has Strengthened In Recent Weeks
Responding to questions on whether the scheme had led to a stronger rupee, Malhotra said the currency has appreciated over the past month, moving from around 97 to 95 against the dollar.
He said the RBI’s objective is not to target a specific exchange rate, but to ensure orderly movement in the currency market. The central bank intervenes only when there is excessive volatility, he added.
Malhotra added that geopolitical developments continue to create uncertainty in global financial markets. He noted that if global tensions ease, the rupee could strengthen further.
External Position Strengthened
The RBI governor said India’s economic fundamentals remain strong and the inflows received under the forex swap schemes have further strengthened the country’s external position. The scheme has met its intended objectives, including supporting the balance of payments, improving liquidity, and strengthening foreign exchange reserves. The RBI has not analysed the inflows based on their geographical source, he said, adding that the overall response has been in line with expectations.
On the impact of the FCNR(B) inflows on the RBI’s balance sheet, Malhotra said the central bank regularly carries out foreign exchange purchases and sales through swap operations. The liquidity created by these transactions is temporary and the RBI’s balance sheet is expanding at a normal pace unless there is an unusually large surge in deposits, Malhotra further said.
