India Bonds Sink on RBI's Early Close of FX Swap Facility

Indian central bank moves forex swap scheme deadline forward

India's central bank, the Reserve Bank of India (RBI), has moved forward the expiration of its foreign exchange swap incentive mechanism by 30 days to August 31, 2026.

India Short-Tenor Bond Yields Climb on Early Dollar Window Close

Shorter-tenor India bond yields surged after the central bank said it will close a special dollar deposit window for overseas residents a month earlier than scheduled.

Indian banks fast-track dollar fundraising after RBI moves FX swap window deadline

India bonds sink on RBI's early close of FX swap facility

The Indian government bond market experienced a dip in demand on Monday, leading to higher yields. In an unexpected move, the central bank accelerated the deadline for its diaspora deposit swap program. This decision came after robust foreign deposit inflows from banks. As policymakers weighed domestic liquidity impacts and borrowing costs, the early deadline disappointed investors, shifting their outlook on upcoming surpluses.

RBI shuts FCNR(B) swap facility early as inflows hit $52.3 billion

The Reserve Bank of India (RBI) has prematurely closed its swap facility for foreign currency non-resident (bank) deposits, FCNR(B), one month ahead of schedule, after banks mobilised $52.3 billion under the scheme by August 13, indicating sufficient foreign currency reserves.

India bonds dip as RBI's diaspora swap move dents sentiment

Early Monday saw a dip in demand for Indian government bonds following the RBI's closure of its swap window. This decision caused the benchmark bond yield to surge, hindering a crucial source of demand. Inflows exceeding $52 billion resulted in foreign exchange reserves hitting a four-month peak. Additionally, the surplus of banking system liquidity saw a threefold increase, while swap rates escalated.