RBI announced dollar/rupee two-year sell buy swap auction

RBI announced dollar rupee two-year sell buy swap auction

Question: The Reserve Bank of India (RBI) has announced a US Dollar/Rupee _ year sell-buy swap auction.
(a) Two
(b) Three
(c) Four
(d) One
Answer: (a)
Related Facts:

  • The Reserve Bank of India (RBI) has announced a US Dollar/Rupee two-year sell-buy swap auctionwith a view to elongating the maturity profile of its forward book and smoothening the receivables relating to forwarding assets.
  • The Central bank will undertake a sell/buy swap auction of $5 billion, which will enable access to a wider set of market participants.
  • The swap will be in the nature of a simple sell/buy foreign exchange swap from the Reserve Bank side.
  • A bank shall buy US Dollars from the Reserve Bank and simultaneously agree to sell the same amount of US Dollars at the end of the swap period.
  • The auction cut-off will be based on the premium amount in paisa terms up to two decimal points.
  • The market participants will be required to place their bids with the premium that they are willing to receive from the Reserve Bank for the tenor of the swap, expressed in paisa terms up to two decimal places.
  • The eligible participants can also submit multiple bids. However, the aggregate amount of bids submitted by a single eligible entity should not exceed the notified amount of auction.
  • The prescribed form can be obtained from the RBI website (https://rbi.org.in/Scripts/BS_ViewForms.aspx).
  • No request for extension of auction window will be entertained.
  • RBI reserves the right to:
  • Decide on the quantum of US Dollar amount to be sold in the swap auction.
  • Accept bids for less than the aggregate notified US Dollar amount.
  • Accept marginally higher than the notified US Dollar amount due to rounding-off effects.
  • Accept or reject any or all the bids either wholly or partially without assigning any reason.


Reference: https://m.rbi.org.in//scripts/BS_PressReleaseDisplay.aspx?prid=53302