The Reserve Bank of India (RBI) on January 27 said it will conduct $10 billion USD/INR Buy/Sell Swap auction for a tenure of three years, according to the release.
The auction will take place on February 4, between 10:30 AM and 11:30 AM.
The near leg or spot leg is on February 6, 2026, and the far leg is on February 6, 2029.
In this mechanism, RBI buys U.S. Dollars from banks in exchange for Rupees (first leg) and agrees to sell them back at a pre-determined future date along with a premium (reverse leg).
The central bank said market participants would be required to place their bids in terms of the premium that they are willing to pay to the Reserve Bank for the tenor of the swap, expressed in paisa terms up to two decimal places.
“The auction cut-off would be based on the premium. The auction would be a multiple price-based auction, i.e., successful bids will get accepted at their respective quoted premium,” RBI said in a release.
RBI announced this measure on January 23 as part of measures to manage liquidity in the banking system.
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