RBI employs forex swap auction to alleviate cash crunch

Published 31/01/2025, 11:24
© Reuters.

Investing.com -- The Reserve Bank of India (NSE:BOI) (RBI) has employed a foreign-exchange swap auction, a tool not used in the past five years, to inject $5.10 billion into the financial system. This move is aimed at easing a severe cash crunch that has been impacting the financial system of the country.

The RBI received bids amounting to $25.59 billion at the USD/INR buy-sell swap auction, which was five times more than what the central bank had offered to buy.

This latest infusion brings the total amount of funds injected into India’s banking system to $7.3 billion over the past two days. This action forms part of the RBI’s wider plan to inject $18 billion to alleviate the tightness in domestic money markets.

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