India's RBI announces mega $10 billion FX swap to infuse rupee liquidity

The Reserve Bank of India (RBI) has announced a record $10 billion dollar/rupee buy/sell swap auction scheduled for February 28, 2025. This move aims to address the persistent liquidity deficit in the banking system, which has been ongoing since mid-December. The three-year swap will involve the RBI purchasing dollars for immediate delivery and selling them for delivery after three years, with the first leg settling on March 4. This marks the largest-ever dollar/rupee swap auction by the RBI and follows a previous $5 billion swap conducted on January 31. The auction is part of the central bank's efforts to inject durable liquidity into the financial system, which has faced tight conditions recently.

 

Source: CNBC-TV18