RBI Forex Swap Attracts Record $136.4 Billion Inflows

The Reserve Bank of India's special foreign exchange swap facility has attracted a record $136.4 billion in inflows, far exceeding initial projections and providing significant support to the Indian rupee. The bulk of the funds, $127.2 billion, came through Foreign Currency Non-Resident Bank deposits, with the remainder from Overseas Foreign Currency Borrowings and External Commercial Borrowings. The facility, announced on June 8, 2026, was designed to bolster dollar liquidity and shield the currency from depreciation pressures. The rupee responded positively to the news, appreciating 47 paise to 94.26 against the US dollar in early trade on September 4. This gain built on a 22-paise rise the previous day, reflecting the market's positive reaction to the strong inflow data. The surge in deposits has pushed India's foreign exchange reserves to a record high of $729 billion as of August 21, enhancing the country's external stability buffer. However, the scale of the inflows has created new management challenges for the central bank. The liquidity surplus in the banking system has swelled dramatically, rising from over Rs 3 lakh crore at the start of August to an estimated Rs 6.