Current Context: RBI’s special foreign-currency swap facility attracted $20.72 billion between 8 June and 17 July 2026.
- About $17.41 billion came through FCNR(B) deposits, $1.97 billion through overseas borrowings and $1.34 billion through External Commercial Borrowings.
- Under the facility, banks exchange foreign currency with RBI at concessional swap rates, reducing hedging costs.
- The scheme was introduced to encourage foreign capital inflows, strengthen India’s balance of payments and improve forex liquidity.
- The inflows also help RBI support the rupee during periods of high crude-oil prices and global uncertainty.
- The FCNR(B) window remains open until 30 September 2026, while the borrowing facilities continue until 31 December 2026.
Question:
Q1.Which source contributed the largest amount under the facility?
a) External Commercial Borrowings
b) FCNR(B) deposits
c) Foreign portfolio investments
d) Overseas bonds issued by the government
Answer: b) FCNR(B) deposits contributed $17.41 billion, forming the largest portion of total inflows.
