RBI buy-sell swap auction draws bids over twice the notified amount

Three-year dollar-rupee swap draws $25 billion in bids against $10 billion on offer

The Reserve Bank of India’s three-year dollar-rupee buy-sell swap auction saw strong demand on Wednesday, with bids amounting to $25 billion against a notified amount of $10 billion.

 

At the auction, the central bank received 317 bids and accepted 118 bids, with the cut-off premium set at 751 paise.

 

The bid-to-cover ratio stood at 2.50, while the weighted average premium of accepted bids was 751.66 paise.

 

The first leg of the swap will be settled on Friday, when the RBI will inject rupee liquidity into the banking system. The transaction will be reversed after three years.

 

The swap auction is part of a broader set of liquidity measures announced by the central bank at the recent monetary policy review, which also includes open market operations (OMOs).