FinMin expects $25 bn inflows via swap windows by Nov-end

The Finance Ministry expects inflows of $25 billion by November end through forex swap windows opened by the Reserve Bank to attract deposits from non-resident Indians and allow banks to borrow overseas.

"Till November 30, our (FCNR-B) window is open. We might even touch $25 billion," Economic Affairs Secretary Arvind Mayaram told reporters here today.

Until yesterday, the RBI had received $17.5 billion through the special windows for swapping foreign currency non-resident (bank) deposits and overseas foreign currency borrowings by banks.

Both were started on September 4 to prop up the rupee, which had fallen almost 30% between April and August.

Referring to the recent decline in the rupee against the dollar, Mayaram said, "I think a crazy, irrational kind of a sentiment is (prevailing in the forex market)."

Continuing its slide for the fifth straight day, the rupee today lost 23 paise to trade at 63.47 on strong dollar demand from importers.

To a query on the impact of the expected US Federal Reserve's withdrawal of its fiscal stimulus, Mayaram said, "When the taper begins, you will see nothing will happen."

The battering of the rupee started in May, after the US Fed hinted at shutting its monthly $85 billion bond purchase programme in a phased manner.

The rupee fell to a record low of 68.85 to the dollar on August 28 and recovered on optimism the Fed would delay tapering its bond buying program.

The local currency started weakening again last week. Mayaram had earlier said dollar purchases by oil companies had partially shifted to the market from a special swap window opened for them by the RBI.