FCNR-B inflows could cost RBI around ₹2 lakh crore in hedging costs: Analysts
CNBC-TV18 1 hr ago·3 Sept 2026, 12:25 pm
The Reserve Bank of India (RBI) is launching a special scheme to encourage foreign investors to park their money in Indian assets. To make this attractive, the central bank plans to offer a concessional rate on currency swaps, which helps investors hedge against currency risk. However, analysts warn this support could come at a significant cost. Estimates suggest the RBI might end up bearing around ₹2 lakh crore in expenses to manage these hedging costs.
For investors, this move signals the RBI's strong intent to boost foreign inflows and stabilize the market. While the concessional rates make the scheme appealing, the potential fiscal burden on the central bank is a key concern. The actual final cost will depend on how the rupee performs against the US dollar over the coming years.
Investors should watch the RBI's policy updates and the rupee's movement in the coming months. Any shift in the rupee's trend could impact the final cost of this scheme, which is a critical factor for the broader market.
Key takeaways
- Category: Economy.
- Flagged as a high-impact, market-moving story.
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