Over $20 billion mobilised through RBI's special swap facility

📌 Summary:

• RBI data released on Monday (July 20, 2026) shows its special foreign currency swap facility has mobilised over $20 billion in forex inflows

• The facility is operationalised through three channels: FCNR(B) deposits (Foreign Currency Non-Resident Bank deposits), External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs)

• Under the mechanism, banks raising foreign currency through these routes can swap the dollars with the RBI for rupees at a pre-announced rate, removing their exchange-rate risk

• RBI noted the facility has seen "avid interest" and attracted steady forex inflows since launch

• Purpose: shore up foreign exchange reserves and stabilise the rupee at a time of external pressure — the rupee has been under strain, trading around 96.42/USD

🎯 UPSC Relevance: GS3 (Indian Economy — external sector, RBI's monetary and forex management toolkit). A concrete example of unconventional central-bank instruments used to defend the currency and build reserves without direct spot-market intervention, useful in Mains answers on rupee volatility and BoP management.

📝 Prelims Facts:

• FCNR(B) = Foreign Currency Non-Resident (Bank) deposit — held by NRIs in foreign currency, so the depositor bears no rupee exchange risk

• ECB = External Commercial Borrowing — commercial loans raised by Indian entities from non-resident lenders

• OFCB = Overseas Foreign Currency Borrowing by banks

• Amount mobilised: over $20 billion

• A currency swap involves exchanging principal/interest in one currency for another with an agreed reversal at a future date

🔑 Key Term: Currency Swap Facility — an RBI arrangement where banks exchange foreign currency for rupees today with a commitment to reverse the exchange at a pre-fixed rate later, effectively hedging the bank's exchange-rate risk and encouraging forex inflows.