India, March 11 -- The Reserve Bank of India (RBI) announced on Monday that it will conduct a $10 billion forex swap on March 24 to inject liquidity into the banking system. The USD/INR Buy/Sell swap auction, with a 36-month tenor, will involve banks selling US dollars to the RBI and simultaneously agreeing to repurchase the same amount at the end of the swap period.
The transaction will be a simple buy/sell foreign exchange swap, where market participants will submit bids based on the premium they are willing to pay, expressed in paisa terms up to two decimal places. The auction cut-off will be determined by the premium offered, the RBI stated in its announcement.
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