RBI to conduct record $10-billion dollar/rupee swap auction to ease liquidity strain

The Indian Reserve Bank (RBI) will hold its largest $ 10 billion / rupee purchase auction on February 28, aims to solve the deficit of stability in the banking system.

According to the exchange agreement, the Central Bank will bring dollars to the immediate delivery and sell them in three years. The first leg of the transaction will be resolved on March 4, and the exchange reverses on March 6, 2028.

This is the second such auction in RBI within a month, a $ 5.1 billion exchange for six months of office on January 31. The last step announces a continuous effort to inject stable liquidity, from mid-December to the banking system with defeating.

Market participants will send on the basis of premium, which they are willing to pay for RBI in two decimal places quoted in Paisa. The auction will operate 10 am. 30 to 11. 30 and the results announced on the same day. The minimum of the applications is $ 10 million, and the applications must multiply $ 1 million.

The $ 5 billion auction in RBI is defined on January 31 on August 4. The Central Bank has taken additional measures to promote liquidity, including reducing its basic interest rate almost five years ago at the beginning of this month. However, market participants emphasize that stable liquidity is necessary for the transfer of effective policy by lenders.

Beyond the exchange of forex, RBI imported the 3.6-third RS RS RS ($ 41.56 billion) through liquidity, debt procurement, foreign exchange interventions and prolonged repo. As of February 20, the Indian banking system collided with Lakh Crore Lack of liquidity lack of Rs. The Central Bank later injected 1.83 Lakh Rsor Rs through long-term repo, which matures in early April.

With a financial system, which accumulates on solid liquidity, the upcoming exchange auction is set to the main test of market appetite and RBI liquidity management strategy.

(With entries from agencies)