Reserve Bank of India Mobilizes $143.6 Billion to Stabilize Rupee

The Reserve Bank of India mobilized $143.596 billion in foreign exchange inflows as of September 18, 2026, through a special USD-INR forex swap facility. Launched on June 8, 2026, the initiative aimed to shield the falling rupee from oil price volatility and foreign portfolio investment outflows while strengthening the balance of payments.

Foreign Currency Non-Resident (Bank) deposits accounted for the bulk of the capital, contributing $132.98 billion before the window closed on August 31. To incentivize these deposits, the central bank absorbed hedging costs on principal amounts for maturities of three to five years. Additional inflows included $5.32 billion from overseas foreign-currency borrowings and $5.296 billion from external commercial borrowings, both of which remain available until December 31, 2026.

S&P Global Ratings characterized the mobilization as a "shot in the arm" for banks, noting that the deposits improve funding stability and bridge asset-liability duration gaps. However, the influx of capital has created a substantial liquidity surplus in the domestic financial system. This has forced the central bank to utilize tools such as OMO purchases and VRRR auctions to absorb the excess cash.