RBI unveils dollar-rupee swap window to draw inflows, steady rupee
New FCNR and ECB swap windows aim to attract long-term foreign currency deposits and cut hedging costs for banks and companies.
Mumbai: The Reserve Bank of India (RBI) on Monday operationalized the foreign currency liquidity measures announced by governor Sanjay Malhotra in Friday’s monetary policy, introducing special dollar-rupee swap facilities for foreign currency non-resident (FCNR) deposits and external commercial borrowings (ECBs) to encourage inflows and support the rupee.
Under the FCNR(B) scheme, banks can access a US dollar-rupee swap facility for fresh foreign currency non-resident deposits mobilized for a tenor of three to five years. The facility will be available only in US dollars, regardless of the currency in which deposits are raised.
Banks will be able to swap dollars with the RBI at par—exchanging dollars for rupees today and reversing the transaction at the same exchange rate at maturity. The window will be open for deposits mobilized until 30 September 2026, while the swap facility will remain available until 16 October 2026.
Swap facility introduced
Separately, the RBI introduced a swap facility for eligible ECBs raised by public sector companies and overseas foreign currency borrowings (OFCBs) raised by banks. These will cover borrowings with an average maturity of three years and above drawn until 31 December 2026, as well as OFCBs raised by banks with a minimum three-year tenor.
Under this facility, banks can sell US dollars to the central bank and agree to buy them back at the end of the swap period. Unlike the FCNR scheme, the ECB/OFCB facility will carry a fixed swap cost of 1.5% per annum, compounded semi-annually, with the maximum tenor linked to the borrowing maturity, subject to a five-year cap.
The RBI also allowed authorized dealer banks to exclude swap positions arising from FCNR(B) deposits, ECBs and OFCBs from their net overnight open position (NOP-INR) calculations, easing regulatory constraints on participation.
The measures are aimed at attracting durable foreign currency inflows, reducing hedging costs for borrowers and banks, and strengthening external buffers amid heightened global uncertainty.
Market participants expect the combined impact of the moves to bring in $40–50 billion in FY27, which could support the rupee.
About the Author
Subhana Shaikh is a business journalist at Mint, where she covers the Reserve Bank of India, monetary policy, and India’s bond markets. She has seven years of experience in reporting on financial markets, with a focus on banking and the broader financial system.<br><br>She began her career after completing her postgraduate diploma at the Indian Institute of Journalism and New Media, Bengaluru. She then spent five years at Informist Media, a news wire agency, where she closely tracked bond markets and the BFSI sector, developing a strong foundation in market reporting. She later moved to NDTV Profit, where she expanded her coverage across a wide range of business and economic stories.<br><br>At Mint, Subhana focuses on explaining central bank decisions, bond market movements, and banking trends for her readers. Her reporting combines on-ground inputs with careful analysis to help audiences understand complex financial developments.<br><br>Based in Mumbai, she is interested in exploring stories across the business landscape. Outside of work, she enjoys reading and spending time with her three cats.
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