RBI shuts FCNR(B) swap window early after $52.3 billion inflow surge
India's central bank abruptly closed its special foreign currency swap facility for non-resident deposits three months ahead of schedule on Friday, citing overwhelming success. The facility, launched in June to shore up foreign exchange reserves, attracted $52.3 billion in deposits by mid-August, forcing the RBI to halt fresh deposit mobilization from August 31 while extending swap access until September 11. The mechanism allowed non-resident Indians to deposit dollars at Indian banks and use the RBI's concessional swap facility to convert proceeds into rupees. The rapid inflows reflected intense demand as banks competed to offer attractive rates and Indian companies sought cheaper offshore dollar funding. The early closure signals the RBI achieved its external financing objectives faster than anticipated, accumulating $56.8 billion across all three facility channels. The parallel External Commercial Borrowing and Overseas Foreign Currency Borrowing windows remain open until year-end.