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What is the story about?
The Reserve Bank of India (RBI) announced a concessional forex swap facility for public sector enterprises to encourage overseas fundraising and support foreign currency inflows amid heightened volatility in global currency markets.
Under the measure, the RBI will provide a concessional forex swap facility until September 30, 2026 to incentivise 3-5 year External Commercial Borrowings (ECBs) by Central Public Sector Enterprises (CPSEs).
The announcement comes at a time when global financial markets are witnessing increased volatility due to risk-off sentiment and rising demand for safe-haven assets.
RBI Governor Sanjay Malhotra noted that major central banks have become more cautious and may tilt towards tighter monetary policy, contributing to fluctuations in foreign exchange markets.
The concessional swap facility is expected to lower hedging costs for state-run firms raising funds overseas, making foreign borrowing more attractive while also helping attract dollar inflows into the country.
The move is part of the RBI's broader efforts to strengthen external buffers and manage currency pressures amid an uncertain global environment.
This is a developing copy
Under the measure, the RBI will provide a concessional forex swap facility until September 30, 2026 to incentivise 3-5 year External Commercial Borrowings (ECBs) by Central Public Sector Enterprises (CPSEs).
The announcement comes at a time when global financial markets are witnessing increased volatility due to risk-off sentiment and rising demand for safe-haven assets.
RBI Governor Sanjay Malhotra noted that major central banks have become more cautious and may tilt towards tighter monetary policy, contributing to fluctuations in foreign exchange markets.
The concessional swap facility is expected to lower hedging costs for state-run firms raising funds overseas, making foreign borrowing more attractive while also helping attract dollar inflows into the country.
The move is part of the RBI's broader efforts to strengthen external buffers and manage currency pressures amid an uncertain global environment.
This is a developing copy
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