- The latest central bank count shows that inflows have doubled in a fortnight to $40.82 billion, up from $20.72 billion on July 17.
- The FCNR-B deposits rose to $36.725 billion, while overseas foreign currency borrowings (OFCBs) increased to $2.575 billion, and external commercial borrowings (ECBs) reached $1.516 billion.
- SBI Research has raised its FCNR-B deposit estimate to $65-70 billion from $40-45 billion and expects aggregate inflows of $80-85 billion, with maturing deposits potentially adding around $10 billion more.
The Reserve Bank of India (RBI) announced that total inflows through its concessional foreign exchange swap facility have reached $40.82 billion since its launch on June 8. This represents a significant increase, doubling from $20.72 billion reported on July 17.1
The bulk of these inflows came from foreign currency non-resident bank (FCNR(B)) deposits, which accounted for $36.72 billion. Other contributions included $2.575 billion from overseas foreign currency borrowings (OFCBs) and $1.516 billion from external commercial borrowings (ECBs).23
The RBI stated, “According to data received from authorised dealer banks, total inflows under the facility stood at $40.816 billion as of July 31,” highlighting the strong interest in the swap facility since its inception.
The rising inflows have positively impacted the RBI's forex reserves, which increased by $6.12 billion to $682.35 billion for the week ending July 24. However, this figure is still below the record high of $728.5 billion reached in February.
The rupee has also shown signs of recovery, closing at 95.39 on July 30, marking its strongest weekly rally since March. This is a significant improvement from its record low of 96.87 on May 20.
The RBI's swap facility, operational until September 30 for FCNR-B deposits, aims to encourage forex inflows and support the balance of payments, which has been in deficit for three consecutive years. Analysts have raised their inflow estimates, with SBI Research projecting total inflows could reach $80-85 billion.456
“SBI Research raised its FCNR-B deposit estimate to $65-70 billion from $40-45 billion and now expects aggregate inflows of $80-85 billion. It also sees deposits maturing in August and September being rolled over under the new facility, adding about $10 billion more.”
