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In the buy/sell swap, the RBI volition bargain $ 5 cardinal from banks and volition springiness them an equivalent magnitude of rupee liquidity to banks (Express Archives)
The Reserve Bank of India (RBI) connected Monday announced to behaviour a $5 cardinal worthy of USD/INR buy/sell swap connected January 31, which is apt to infuse Rs 43,000 crore of liquidity into the banking system.
The regulator besides announced unfastened marketplace cognition (OMO) acquisition auctions aggregating to RS 60,000 crore and a 56-day adaptable complaint repo (VRR) auction successful February. All the 3 measures are aimed astatine easing tightness successful liquidity information which is moving into a shortage of implicit Rs 3 lakh crore.
The RBI said USD/INR buy/sell swap auction of $ 5 cardinal for a tenor of six months volition beryllium held connected January 31, 2025.
“Buy/sell swaps, if afloat subscribed, are projected to adhd Rs 43,000 crore of liquidity into the system,” said VRC Reddy, Head Treasury, Karur Vysya Bank. The funds volition travel into the strategy connected February 4.
In the buy/sell swap, the RBI volition bargain $ 5 cardinal from banks and volition springiness them an equivalent magnitude of rupee liquidity to banks. The swap volition mature successful six months, which means the RBI volition merchantability $5 cardinal to banks, thereby taking retired a akin magnitude of rupee liquidity from the system.
The RBI had past conducted a $5 cardinal of sell/buy swap connected April 26, 2022 and it matured successful October 2023.
The OMO acquisition auctions of authorities securities for an aggregate magnitude of Rs 60,000 crore volition beryllium conducted successful 3 tranches of Rs 20,000 crore each to beryllium held connected January 30, 2025, February 13, 2025, and February 20, 2025, the RBI said successful a release.
The 56-day Variable Rate Repo (VRR) auction amounting to Rs 50,000 crore volition beryllium held connected February 7, 2025.
The OMO is affirmative for the liquidity situation and yields. The VRR auction whitethorn witnesser constricted involvement from banks, considering the outcomes of erstwhile auctions, Reddy said.
The shortage successful the banking strategy liquidity widened to Rs 3.13 lakh crore connected January 27. The tightness successful the liquidity is owed to the RBI’s continued dollar income to curb rupee depreciation.
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