Reserve Bank of India (RBI) has received $ 17.5 billion so far under the special concessional window for swapping foreign currency non-resident (banks) deposits and overseas foreign currency borrowings by banks.
India’s Apex Bank had operationalized these special windows on September 4 to shore-up Indian currency, which had depreciated by 30% between April and August. Through these windows, which are expected to remain open till November 30, RBI allows banks to swap the fresh FCNR (B) dollar funds, mobilised for a minimum tenor of three years and over, at a fixed rate of 3.5% per annum for the tenor of the deposit.
Meanwhile, RBI has also permitted banks to borrow up to 100% of tier I capital from overseas, which can be swapped with the central bank at a concessional rate of 100 basis points below the ongoing swap rate prevailing in the market.
The Indian currency, which has gained nearly 11% from September till date on account of higher dollar inflows and other measures taken by the RBI and the government, has once again been on depreciating streak since past few days after reports suggested of RBI moving back upto 30-40% of state-run oil firms’ demand in the market.
India’s Apex Bank had operationalized these special windows on September 4 to shore-up Indian currency, which had depreciated by 30% between April and August. Through these windows, which are expected to remain open till November 30, RBI allows banks to swap the fresh FCNR (B) dollar funds, mobilised for a minimum tenor of three years and over, at a fixed rate of 3.5% per annum for the tenor of the deposit.
Meanwhile, RBI has also permitted banks to borrow up to 100% of tier I capital from overseas, which can be swapped with the central bank at a concessional rate of 100 basis points below the ongoing swap rate prevailing in the market.
The Indian currency, which has gained nearly 11% from September till date on account of higher dollar inflows and other measures taken by the RBI and the government, has once again been on depreciating streak since past few days after reports suggested of RBI moving back upto 30-40% of state-run oil firms’ demand in the market.
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