The RBI launched a special Forex Swap facility on 08 June 2026 to strengthen India’s foreign exchange reserves, which were under pressure from a weak rupee, high oil imports and outflows of FPIs. By 21 August 2026, the scheme had generated $72.85 billion in foreign exchange.
Key Developments
- Inflow of $64.40 billion through FCNR(B) Deposits.
- Inflow of $4.86 billion via OFCBs.
- Inflow of $2.59 billion through ECBs.
- The scheme remains open for FCNR(B) deposits until 31 August 2026 and for ECBs and OFCBs until 31 December 2026.
Important Facts
- Total foreign exchange generated: $72.85 billion (≈ ₹6.1 trillion).
- Share of each instrument: FCNR(B) ~88%, OFCBs ~7%, ECBs ~4% of total inflow.
- The swap facility is a USD‑INR mechanism, allowing the RBI to receive foreign currency and provide rupees to eligible borrowers.
Exam Relevance
This move illustrates how the central bank uses market‑based tools to manage the external sector, a key topic in GS 3 – Economy. Understanding Forex Swap facilities helps answer questions on foreign exchange management, balance‑of‑payments stability, and the impact of capital flows on the rupee. It also links to the broader theme of financial sector reforms and the role of NRIs in mobilising foreign capital.
Way Forward
To sustain reserve growth, the RBI may consider extending the swap window or widening eligibility to other qualified instruments. Continuous monitoring of FPI trends will be essential to pre‑empt rupee volatility. For aspirants, tracking such policy tools provides insight into how India balances external financing needs with macro‑economic stability.