RBI to inject long-term liquidity worth $5 bn through foreign exchange swap

Under the swap auction, minimum bid size would be $25 million and in multiples of $1 million thereafter

The Reserve Bank on Wednesday said it will inject long-term liquidity worth $5 billion into the system through foreign exchange swap arrangement with banks for three years.

The swap will be in the nature of a simple buy/sell foreign exchange swap from the Reserve Bank side. Under the swap, a bank would sell US dollars to the RBI and simultaneously agree to buy the same amount of US dollars at the end of the swap period.

"In order to meet the durable liquidity needs of the system, the Reserve Bank has decided to augment its liquidity management toolkit and inject rupee liquidity