India's RBI FX forward book hits record $136.7 billion on surging overseas deposits

Business Recorder reported that India's central bank recorded its largest-ever forward book, at $136.7 billion, in July. That level was roughly $33 billion above June and beat the earlier top of $106.6 billion from May. The rise was powered by a jump in deposits held abroad, which followed the RBI's moves to attract dollars and strengthen the rupee.

A central measure was a scheme for FCNR deposits that let commercial lenders exchange dollars raised from non-resident Indians with the central bank without charge. Such deposits made up most of the overseas money banks brought in, reaching $65.4 billion of a $72.8 billion total up to August 21. Separately, India's reserves climbed to a record $729.3 billion in the week ending August 21, giving the RBI more room to defend the currency.

Obligations falling due after twelve months reached $91.5 billion in July, compared with $64.2 billion the month before, and that band is where most of the FCNR-linked swap exposure should appear. Business Recorder noted that analysts expect reserves and the forward position to keep growing, because July reflects just a portion of the money drawn in and FCNR deposits remain eligible for swaps through August 31. In the spot market, the central bank has sold dollars over recent sessions to cushion the currency against higher crude costs and worries about American rates.