Rupee slips 17 paise to 95.59 against dollar as RBI shortens FCNR window

The Indian rupee depreciated by 17 paise to 95.59 against the U.S. dollar in early trade on Monday, August 17, 2026, as investor sentiment turned cautious following the Reserve Bank of India's (RBI) decision to advance the cut-off date for its concessional swap facility for FCNR (B) deposits.

The RBI had introduced the swap facility earlier to encourage foreign currency inflows and support the rupee amid global uncertainties. On August 14, the central bank said the facility will now be available only for deposits mobilised until August 31, instead of the earlier deadline of September 30. According to the RBI, the facility has attracted USD 56.84 billion in inflows up to August 13.

Under the FCNR (B) scheme, banks can accept foreign currency deposits from non-resident Indians and offer attractive interest rates. The swap facility enabled banks to convert these foreign currency liabilities into rupees at a concessional rate, making it easier for them to provide competitive returns. The RBI's move effectively advances the deadline for banks to mobilise deposits under the scheme to August 31.

At the interbank foreign exchange market, the rupee opened at 95.50 and then slipped to 95.59, down 17 paise from its previous close. On Friday, the rupee had appreciated 3 paise to close at 95.42 against the dollar. The rupee's decline on Monday brought it closer to the 96 level.

Amit Pabari, Managing Director of CR Forex Advisors, said that after attracting nearly USD 50 billion of forex inflows, the central bank has now announced that the facility will be available only for deposits mobilised until August 31, 2026. "The support from these inflows remains significant, but the market will eventually begin looking beyond this temporary cushion," he said.

While the rupee may remain supported in the near term, the overall risk-reward appears tilted towards weakness, Pabari added. "Technically, the 95.20–95.30 zone is likely to act as an important support area. As long as this level holds, USD/INR could gradually move towards the 96.20–96.50 region in the coming days," he observed.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12% lower at 99.54. Brent crude, the global oil benchmark, was up 0.47% at $88.94 per barrel in futures trade. Higher crude prices generally weigh on the rupee, as India is a major importer of oil.

On the domestic equity market front, the Sensex declined 284.85 points to 77,717.05 in early trade, while the Nifty dipped 69.25 points to 24,297.05.

Foreign institutional investors purchased equities worth ₹508.12 crore on a net basis on Friday, according to exchange data. This suggests a steady interest from foreign investors in Indian markets, which could provide some support to the currency.

India's forex reserves jumped by $14.136 billion to $707.002 billion during the week ended August 7, the RBI said on Friday. The overall kitty had increased by $10.512 billion to $692.866 billion in the previous reporting week ended July 31. The steady rise in reserves reflects the impact of the swap facility and other inflows.

Market participants are expected to closely monitor global cues such as crude oil prices and the dollar index, along with any further announcements from the RBI on foreign exchange management. The currency's near-term trajectory will likely depend on these factors.