RBI's early swap closure caps dollar inflows at $127 billion

The Reserve Bank of India closed its concessional swap facility for FCNR(B) deposits on August 31, a month ahead of schedule, after banks mobilised $127.2 billion under the scheme. The early closure aims to cap dollar inflows that have already outpaced the $26 billion raised in 2013, when then RBI Governor Raghuram Rajan launched a similar swap scheme. Back then, the rupee appreciated by 2.84 per cent against the dollar in over two months, compared to a 0.18 per cent gain this time. FCNR(B)'s share within NRI deposits, which touched 40 per cent in 2013-14, fell sharply to 12 per cent by FY22, before recovering to 21 per cent by FY27 (as of June), still just over half its 2013-14 level.