Trade Update Closing our short THB INR for a small gain, as RBI brings forward FCNR(B) deadline

Economics Research 17 August 2026 | 11:53PM SGT

Trade Update: Closing our short THB/INR for a small gain, as RBI brings forward FCNR(B) deadline

We initiated a short THB/INR trade recommendation on 12 June, based on the RBI’s Danny Suwanapruti | package of FX measures to attract capital inflows, with the position funded out of Goldman Sachs (Singapore) Pte THB. Since inception, the trade has performed reasonably well, driven largely by Santanu Sengupta accrued carry. Over this period, THB underperformed broader NJA FX peers, | consistent with our view. THB remains under pressure due to weaker macro Goldman Sachs India SPL

fundamentals, including negative real rates in Q2 as inflation rose on higher energy Andrew Tilton | prices, a deterioration in the current account balance into deficit territory driven by Goldman Sachs (Asia) L.L.C. higher energy imports and data centre-related capital imports. The Bank of Thailand (BoT) introduced measures to regulate gold trading, which was intended to de-link the positive correlation between gold and THB. We think these measures have helped reduce the correlation, but with gold prices rising recently, there is still some risk that the magnitude of THB weakness may be curtailed.

That said, there have been important developments in India. The RBI has announced that the FCNR(B) swap facility for new deposits will close on 31 August 2026, one month earlier than the previously announced 30 September deadline. Gross FCNR(B) deposits stood at $52.3bn as of 13 August, alongside a further $4.5bn raised through External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs). We estimate net FCNR(B) inflows at around $40bn. Notably, there has been no change to the ECB hedging facility, which we expect to remain in place through year-end, allowing for further inflows over the remainder of 2026. The rationale for the early closure is not yet clear, but in our view it likely reflects the RBI’s assessment that BoP stress has eased. Oil prices are now below Q2 levels, net FDI inflows appear to have improved in Q2 based on provisional RBI estimates, FII equity inflows have turned positive, and bond inflows since the June policy meeting have been sizeable. In that context, the RBI may be less willing to add to its already large short forward FX book, which already stood above $106bn at end-May 2026. With USD/INR likely to remain broadly range-bound around 94-96 in our view, we see less conviction in the THB/INR cross from here, as the catalyst for the trade (i.e. the RBI’s FX measures) is largely behind us. Moreover, improved fundamentals may not necessarily lead to an INR rally, as the RBI will likely use episodes of INR strength to reduce its FX forward book and/or replenish their FX reserves. Therefore, we close our short THB/INR recommendation for a small gain of just under 1% (mostly from accrued carry).

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

Reg AC We, Danny Suwanapruti, Santanu Sengupta and Andrew Tilton, hereby certify that all of the views expressed in this report accurately reflect our personal views, which have not been influenced by considerations of the firm’s business or client relationships. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division. Contributing Authors: Danny Suwanapruti Goldman Sachs (Singapore) Pte, Santanu Sengupta Goldman Sachs India SPL, Andrew Tilton Goldman Sachs (Asia) L.L.C.. Unless otherwise stated, the individuals listed in the Contributing Authors disclosure of this report are analysts in Goldman Sachs’ Global Investment Research division.

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