The Reserve Bank of India closed its FCNR deposit swap facility ahead of schedule after attracting $57 billion in inflows.
The Indian Rupee steadied near 95.50 against the US Dollar on Monday, recovering from recent losses. The RBI’s decision to end its FCNR forex swap window a month early may pressure the currency in the near term, though inflows reached $57 billion under the facility.
Traders expect the USD/INR pair to trade between 95.00 and 95.50 this week, with overseas clients rushing to secure deposits before the August 31 closure. Foreign portfolio flows and hedging activity will also influence movement, while investors await the RBI’s August policy meeting minutes.
Analysts project the RBI will either begin a shallow rate-hiking cycle in December or maintain its pause through 2026, supported by contained inflation, which rose modestly to 4.45% year-over-year in July.