RBI Special Swap Facility Attracts Over $40 Billion in Inflows

The Reserve Bank of India (RBI) mobilized $40.816 billion in foreign currency inflows between June 8 and July 31, 2026, through a special concessional dollar swap facility. The initiative, launched on June 5, aimed to strengthen India's balance of payments and stabilize the rupee after the currency hit a record low in May. Foreign Currency Non-Resident (Bank) deposits were the primary driver, contributing $36.725 billion, while overseas foreign currency and external commercial borrowings added $2.575 billion and $1.516 billion, respectively.

Private and foreign banks outperformed public sector lenders in mobilizing these deposits. HSBC led all participants with $6.14 billion, followed by State Bank of India with $4.12 billion and ICICI Bank with $3.69 billion. To support these high-interest deposits, Indian lenders are aggressively raising dollar-denominated debt, with projections suggesting up to $30 billion in offshore loans and $10 billion in global bonds for the remainder of 2026.

These measures contributed to a rise in foreign exchange reserves, which reached $682.354 billion for the week ending July 24, 2026. This recovery follows a period of depletion where the RBI sold $14.9 billion between January and May to curb volatility. Minister of State for Finance Pankaj Chaudhary stated the facility is intended to attract stable inflows and ease pressure on the rupee. Meanwhile, Governor Sanjay Malhotra expressed confidence that these structural measures will improve economic sentiment, even as the central bank monitors inflation risks and considers maintaining interest rates at 5.25%.