Mumbai: The Reserve Bank of India on Wednesday announced that it will conduct a USD/INR buy-sell swap auction worth $5 billion on May 26 to inject liquidity into the banking system amid evolving market conditions.
According to the central bank, the auction will be conducted for a tenor of three years and is scheduled to take place between 10:30 a.m. and 11:30 a.m. on May 26.
The near-leg or spot settlement date has been fixed as May 29, 2026, while the far-leg maturity date will be May 29, 2029. The RBI said the decision was taken after reviewing current and evolving liquidity conditions in the financial system.
Under the swap arrangement, banks will sell US dollars to the RBI and simultaneously agree to buy back the same amount of dollars at the end of the swap tenure.
The mechanism allows the central bank to infuse rupee liquidity into the banking system while managing foreign exchange reserves. The auction will follow a multiple price-based format, meaning successful bidders will be allotted swaps at the premium quoted by them. (IANS)
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