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RBI’s Three-Year USD-INR Buy/Sell Swap Auction

22 February 20251 min read
BANKING & FINANCERBI’s Three-YearUSD-INR Buy/SellSwap Auction22 February 2025safalsetu.com

Why in the news

RBI planned another dollar swap to ease rupee liquidity and calm the currency.

Key facts

  • Tenor: 3 years; purpose is durable rupee liquidity.
  • Bids: quoted as premiums in paise to two decimals; successful bidders pay their own quoted premium (multiple-price format).
  • Eligibility: Authorized Dealer Category I banks only.

Market view

  • Dilip Parmar of HDFC Securities expected short-term rupee support; spot USD/INR seen near 86.30.

Exam angle

  • Swap type: buy/sell; auction type: multiple price.

Test yourself

1. What is the tenor of the USD-INR buy/sell swap auction announced by RBI in this report?

The long-term swap has a tenor of 3 years.

2. Which entities are eligible to bid in RBI's 3-year USD-INR swap auction?

Only Authorized Dealers Category I banks may participate.

3. What auction format applies to RBI's 3-year USD-INR swap, with successful bids honoured at their quoted premiums?

It is a multiple-price auction where winning bids are honoured at their own quoted premiums.

This topic is part of Daily Current Affairs 22 February 2025 (10 topics).

All topics of the dayDay quizFebruary 2025

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