New Delhi, Sept. 14 -- In 279 BCE, Greek king Pyrrhus of Epirus fought the Roman empire in the Battle of Asculum. Against steep odds, Pyrrhus won but lost most of his best generals and much of his army. Since then, a 'pyrrhic victory' is deemed to be one that comes at such a heavy cost that it feels like a defeat.

The Reserve Bank of India's (RBI) foreign exchange swap window, having attracted a humungous $136 billion, risks becoming a Pyrrhic victory unless RBI (and the government) stay ahead of the curve to manage an unprecedented market impulse.

The victory in itself is clear. Despite RBI shutting the window for foreign currency non-resident (bank) or FCNR-B deposits more than a month before its original schedule, its scheme attracte...