Daily
250 words
7/10
Rating

3 August 2026

RBI foreign currency swap facility

The RBI foreign currency swap facility is a specific monetary policy tool used for balance of payments management, which directly relates to the mobilization of resources and macroeconomic stability in the Indian economy.

1 min read Day 6 of 10 1 questions 1 prelims

Notes

  • The Reserve Bank of India (RBI) introduced a concessional swap facility on June 5 to encourage foreign currency inflows and strengthen India's balance of payments.
  • The facility covers fresh Foreign Currency Non-Resident (Bank) (FCNR(B)) deposits, Overseas Foreign Currency Borrowings (OFCB), and External Commercial Borrowings (ECB).
  • As of July 31, the facility has successfully mobilised $40.82 billion.
  • The central bank reported steady forex inflows and avid interest in the facility since its commencement on June 8.

Part of a longer story

This is day 6 of 10 in RBI foreign currency swap facility, which has been running since 14 July 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

  1. Explain the role of concessional swap facilities in managing India's Balance of Payments. How do such interventions by the Reserve Bank of India influence foreign currency inflows? 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00

Prelims

  1. The RBI's concessional swap facility introduced in June was aimed at encouraging inflows through which of the following instruments?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-08-03/rbi-foreign-currency-swap-facility