RBI Launches Dollar-Rupee Swap to Draw Inflows as FY27 CAD Risks Top 2% of GDP
Updated
Updated · BusinessLine · Jun 14
RBI Launches Dollar-Rupee Swap to Draw Inflows as FY27 CAD Risks Top 2% of GDP
3 articles · Updated · BusinessLine · Jun 14
Summary
India’s central bank has offered dollar-rupee swap facilities to banks for fresh 3-5 year FCNR(B) deposits and to PSUs raising overseas commercial borrowings, while taking on the hedging cost to pull in foreign currency.
The move targets a weakening financing mix: FPI equity outflows have exceeded ₹2.5 lakh crore in 2026, net NRI deposit inflows fell 11% to $14.4 billion in FY26, and external commercial borrowings dropped 23% to $14.2 billion.
Those pressures come as analysts see FY27’s current account deficit rising above 2% of GDP, driven by higher oil prices, a wider goods trade gap and uncertainty over whether remittances can offset import costs.
India still posted a surprise $7.1 billion current account surplus in Q4 FY26 on strong services exports and remittances, though FY26 as a whole logged a $25.2 billion deficit, or 0.6% of GDP.
Banks have already raised FCNR(B) deposit rates by 200-400 basis points, and the RBI and government are also trying to channel more foreign money into debt markets through tax breaks on government securities.