India's foreign exchange reserves rise to $716.9 bn as banks attract record FX

New Delhi, Aug 22 – India's foreign exchange reserves have jumped to $716.90 billion, up $9.905 billion from the previous week, according to the Reserve Bank of India. The surge follows a massive USD 72.848 billion inflow collected by authorized dealer banks through the central bank’s special swap facility up to August 21.

The bulk of the inflow, amounting to USD 65.397 billion, originated from foreign currency non‑resident bank deposits (FCNR(B)). An extra USD 7.451 billion was secured via external commercial borrowing (ECB) and overseas foreign currency borrowing (OFCB) mechanisms.

Launched on June 8, 2026, the swap facility aims to alleviate rupee pressure and augment foreign currency flows. RBI has announced that the FCNR(B) deposit window will stay open until August 31, 2026, while ECB and OFCB options remain available through December 31, 2026.

Recent policy adjustments, including a hike in interest rates on FCNR(B) deposits and moving the scheme’s closing date from September 30 to August 31, have stimulated strong investor response. SBICAP research predicts an additional $25‑$30 billion could flow in before the end of August, potentially bringing total FX collection close to $85 billion.

The estimated cost of the swap arrangement stands at about $10.5 billion, roughly 15 % of the total foreign currency pool, a figure deemed acceptable relative to India's sizable reserves.

The record inflow has reinforced the rupee and fortified the country’s foreign exchange reserves, enhancing its ability to weather global economic uncertainties and external shocks.