Mumbai: Strong inflows from a foreign deposit drive prompted the Indian central bank to cut short a zero-cost FX swap facility for banks, with policymakers also wary of the domestic liquidity effects and the cost of such fundraising, analysts said.
The Reserve Bank of India brought forward on Friday the last date for its swap facility by a month after banks collected a more-than-expected $50 billion of deposits from non-resident Indians in about two months.
