Rupee declines to a 2-week low on early closure of swap facility to attract FCNR-B deposits
Traders indicated that RBI was present in the market, stabilising the Rrupee through Ddollar sales
The Indian rupee closed at a two-week low of 95.61 per dollar on Monday, dragged down by the early cessation of the Reserve Bank of India's (RBI) concessional swap facility aimed at attracting fresh Foreign Currency Non-Resident-Bank (FCNR-B) deposits and importer demand for Dollars. The rupee traded between 95.48 and 95.62 intraday, with traders suggesting the RBI was present in the market to stabilize the currency through dollar sales.
The RBI had announced on August 14th that it would discontinue the limited-period concessional swap facility offering banks to attract inflows into FCNR-B deposits a month before its scheduled closure. This decision followed a significant accretion of $52.30 billion in these deposits between June 8, 2026 and August 13, 2026. The RBI clarified that the concessional swap facility will now only be available for FCNR-B deposits of 3-5 years maturity mobilized till August 31, 2026, rather than the previous deadline of September 30, 2026.
The central bank is set to provide these swaps to banks with RBI till September 11, 2026, compared to the earlier deadline of October 16, 2026.
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