📷 Image: Wikimedia Commons / YESNetwork
Business
External pressures on India linger despite fresh forex swap inflows, says RBI’s Nageswaran
✍️ The Economic Times
🗓 25 Sep 2026, 06:18 AM
👁 8
RBI’s external sector chief Nageswaran said that, although recent foreign exchange swap inflows have bolstered reserves, India continues to face significant external pressures.
RBI’s external sector chief, Nageswaran, told The Economic Times that the Indian economy is still under considerable external pressure even after the central bank received fresh foreign exchange swap inflows. He emphasized that the swap operations have added to the country’s foreign exchange reserves but have not eliminated the underlying challenges.
The recent swap inflows stem from the RBI’s agreements with foreign central banks to exchange currency for a limited period, a tool used to manage short‑term liquidity and support the rupee. While these transactions increase the official reserve buffer, they are temporary and do not address longer‑term external vulnerabilities.
Nageswaran pointed to factors such as global monetary tightening, capital outflows from emerging markets, and a strong US dollar as the main sources of the persistent pressure. These dynamics can affect capital flows, foreign investment and the cost of external financing for Indian firms.
The central bank, he added, continues to monitor the situation closely and will use its policy toolkit, including swaps and other market operations, to mitigate any adverse impact on the economy.
The recent swap inflows stem from the RBI’s agreements with foreign central banks to exchange currency for a limited period, a tool used to manage short‑term liquidity and support the rupee. While these transactions increase the official reserve buffer, they are temporary and do not address longer‑term external vulnerabilities.
Nageswaran pointed to factors such as global monetary tightening, capital outflows from emerging markets, and a strong US dollar as the main sources of the persistent pressure. These dynamics can affect capital flows, foreign investment and the cost of external financing for Indian firms.
The central bank, he added, continues to monitor the situation closely and will use its policy toolkit, including swaps and other market operations, to mitigate any adverse impact on the economy.