MUMBAI, Aug 20 (Reuters) – India’s central bank expects close to $80 billion in inflows via subsidised swap facilities opened in June as a way to bolster foreign exchange reserves, central bank governor Sanjay Malhotra said in an interview to the Financial Express newspaper on Thursday.
Last week, the Reserve Bank of India decided to close one of the schemes, a discounted swap facility for dollar deposits by non-resident Indians, earlier than anticipated.
Here are Malhotra’s key comments:
-
Across all three schemes, we expect inflows of at least $80 billion. “This reflects the strong macroeconomic fundamentals of our country and would also further strengthen our balance of payments,” Malhotra said.
-
Advancing the last day of the swap window for FCNR(B) deposits is a well-thought-out, calibrated, prudent and data-driven response to the evolving situation.
-
The decision to advance the closure “is from a position of strength”.
-
Flows have been stronger than we expected and even stronger than what most market participants expected.
-
RBI’s net forward forex position is very manageable, Malhotra said. He added the exchange rate continues to be market-determined.
-
“Our policy on intervention remains the same: to curb excessive volatility and any undue speculative activity,” he said.
