Compare RBI's 2013 and 2026 FCNR(B) swap interventions as tools of exchange rate management.

FCNR(B) is a foreign-currency-denominated term deposit for NRIs. Twice — in 2013 and in 2026 — the RBI has offered banks a concessional swap against such deposits to draw dollars in and steady the rupee. The two episodes share a design but differ sharply in scale, trigger and side-effects.

Similar design: a subsidised swap, repeated

• 2013: only fresh FCNR(B) deposits mobilised after 6 September 2013, of minimum three-year maturity with a one-year lock-in, swappable with RBI at a fixed 3.5% per annum [1].
• 2026: under the circular of 8 June 2026, RBI offered a plain buy/sell swap on the principal, again with a three-year minimum tenor, swap tenor up to five years, and coverage widened to ECBs and OFCBs [2].
• In both, RBI — not the Budget — absorbs the gap between the market forward premium and the concessional rate.

Divergent scale and context

• 2013 was crisis firefighting during the taper tantrum, mobilising a small fraction of the later sum.
• 2026 was pre-emptive reserve-building on a far larger scale: $127.2 billion in FCNR(B) deposits by closure on 31 August 2026, plus OFCBs ($5.3 bn) and ECBs ($3.9 bn), totalling $136.4 billion provisionally [3]. The window was shut a month ahead of schedule.

Effectiveness as a rupee-defence tool

• Both raised reserves, but the dollars travelled NRI → bank → RBI, with little spot-market selling — so support was largely through confidence and signalling.
• 2026's sheer size spilled into domestic liquidity: RBI had to absorb surpluses through large VRRR operations, including a ₹7 lakh crore three-day auction on 4 September 2026 [4], weakening policy-rate transmission.
• Crucially, both raised debt, not durable capital, creating bunched repayment obligations.

Thus the two interventions confirm the swap window as an effective but one-off insurance instrument — it buys reserves and time, not exchange-rate strength. Going forward, staggering repayments through the forward market, transparent disclosure of hedging costs, and a decisive shift towards FDI and long-term equity would convert episodic relief into lasting external-sector resilience.