Why it’s a good thing that RBI’s swap facility for overseas-Indian deposits is closing early
An excess of consumption over domestic savings is not a problem in itself, so long as it is financed by capital inflows. In the first quarter of 2026-27, it was feared that India’s $3.1 billion CAD would keep getting worse as oil prices surged along with asset portfolio outflows, and that it would push the currency further down. Especially since our balance of payments had also been worsening over the past few years. Those fears seem to have receded to an extent in Indian policy circles since.
