RBI cuts FX swap window as NRI deposits surge
Mumbai: The Reserve Bank of India has shortened the window for non-resident Indians to deposit funds with Indian banks, citing strong inflows and concerns over liquidity effects. In just two months, NRIs deposited over $50 billion, prompting the central bank to bring forward the deadline for its FX swap facility by a month. Analysts suggest the RBI may have found diminishing returns in keeping the window open through September.
The overseas fundraising has helped bolster foreign exchange reserves, which have risen to nearly $700 billion. However, the accumulation of these deposits could complicate rupee liquidity management in the future.
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