RBI Early Closure of Forex Swap Facility
The Reserve Bank of India (RBI) announced on 14 August 2026 that it will close its discounted foreign‑exchange swap facility for banks one month ahead of schedule. The zero‑cost hedging window, originally set to run until 30 September, has been moved forward to 31 August.
The facility, introduced in June as part of a broader package of measures to strengthen India’s balance of payments position, allowed banks to raise overseas foreign‑exchange deposits at a discounted rate. According to the RBI statement, the encouraging response and the resulting foreign‑exchange inflows prompted the early termination.
Between 8 June and 13 August, the RBI received a total of $52.3 billion through FCNR (Foreign Currency Non‑Resident) deposits raised by banks. In addition, $1.7 billion was raised via swap facilities for external commercial borrowings, and $2.8 billion came from overseas foreign‑currency borrowings by authorized lenders, bringing the overall inflow to more than $50 billion.
The RBI clarified that the windows for external commercial borrowings and overseas foreign‑currency borrowings will remain open until the end of the calendar year, as originally planned, allowing continued access to those channels beyond the early closure of the swap facility.