Overview
- RBI staff data show currency in circulation rose 13.5% year‑on‑year to ₹43.46 trillion and reserve money climbed 10.3% to ₹53.24 trillion, figures reported for the period ending October 15.
- The jump in cash followed a special dollar‑rupee swap window the RBI opened on June 8 that helped banks mobilise about $133 billion in FCNR(B) deposits by August 31.
- Reserve money growth also reflects the central bank’s net open‑market purchases of roughly ₹8.8 trillion in FY26 and adjustments to the cash reserve ratio that increased system liquidity.
- The RBI has noted retail inflation has broadened across more goods, introduced rules to curb speculative FX trading, and signalled it may withdraw liquidity to contain price pressures.
- Stronger inflows have bolstered foreign exchange reserves and narrowed the trade gap, but any RBI withdrawal of liquidity could tighten funding, raise borrowing costs, and affect consumer and business credit availability.