The Reserve Bank of India (RBI) will direct its purchase exchange auction of $ 10 billion $ 10 billion on February 28, aimed at processing the liquidity deficit persisting in the banking system.
Under the exchange agreement, the central bank will buy dollars for immediate delivery and sell them for delivery after three years. The first step in the transaction will be adjusted on March 4, the reversing exchange on March 6, 2028.
This marks the second auction by RBI in less than a month, following an exchange of $ 5.1 billion on January 31 for a six -month term. The last decision indicates a continuous effort to inject lasting liquidity, the deficits of the persistent banking system since mid-December.
Participants in the market will submit according to the premium that they are ready to pay at the RBI, quoted in terms of two decimal. The auction will take place from 10:30 am to 11:30 am, with results announced on the same day. The minimum size of the offer is $ 10 million and the offers must be in multiple $ 1 million.
The previous auction of $ 5 billion from RBI on January 31 should reverse on August 4. The central bank has also taken additional measures to increase liquidity, including the reduction of its key interest rate for the first time in almost five years earlier this month. However, market players emphasize that sustained liquidity is essential for transmission of effective policy by lenders.
Beyond Swaps Forex, the RBI made it possible to allow RS 3.6 Lakh crores (41.56 billion dollars) of sustainable liquidity thanks to debt purchases, exchange interventions and long-term standards. As of February 20, the banking system of India was faced with a shortfall of approximately RS 1.7 Lakh crosses. The central bank also injected RS 1.83 Lakh crosses via long -term references that would mature in early April.
With the financial system struggling with close liquidity conditions, the next Swap auction should be a key test for market appetite and the RBI liquidity continuous management strategy.
(With agency entries)
