To incentivise foreign currency inflows, the Reserve Bank of India will swap fresh dollar term deposits raised until end-September at par. In effect, the RBI will bear the entire hedging cost on deposits mobilised under the Foreign Currency Non-Resident (Bank), or FCNR(B), scheme. In line with the RBI's expectations, banks are passing on almost the entire benefit to depositors, making these deposits more attractive.
The Reserve Bank of India is incentivizing foreign currency inflows by swapping fresh dollar term deposits at par until September, effectively bearing the hedging costs for FCNR(B) deposits. This move makes these deposits more attractive as banks are passing on the full benefits…
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