 "RBI injects $5.1 billion liquidity through oversubscribed FX swap auction")
The Reserve Bank of India's $5 billion 6-month dollar/rupee buy-sell swap auction was oversubscribed five-fold on Friday, with the central receiving bids totaling $25.59 billion from 253 participants.
The swap will infuse rupee liquidity into the banking system and is part of a swathe of the central bank's measures to inject a total of about 1.5 trillion rupees of liquidity into the banking system.
The RBI accepted 28 bids, totaling $5.1 billion, in the auction and the premium cut-off was set at 96.81 paisa, slightly below the prevailing market level before the auction results were announced.
Dollar-rupee forward premiums dipped slightly in reaction to the auction's results, with the 1-year implied yield trimming its rise to last quote at 2.24 per cent.
The FX swap involves the RBI buying spot dollars on Friday, which serves the twin purposes of both injecting rupee liquidity and draining some of the excess dollars from the system. The transaction will be reversed in six months.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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