Bringing in US dollars: RBI flags off FCNR(B) chase, pushes banks to go all out for forex inflows

RBI Deputy Governor Jain urged bank CEOs to aggressively mobilize FCNR(B) deposits from NRIs, marking the first such special window since 2013, offering a 1.5% fixed-rate swap facility. Banks have hiked FCNR(B) rates by 200-300 bps to 5.25-7.1% on 3-5 year tenures, with the RBI absorbing the full hedging cost to incentivize inflows. Economists estimate the measures could attract $30-70 billion in forex inflows and lift the rupee to 92-93 levels, against a backdrop of the rupee depreciating ~11% last fiscal and forex reserves falling to $681 billion from a February peak of $728 billion.