The Reserve Bank of India (RBI) has announced measures to add long-term liquidity to the banking system, including a $5 billion USD/INR buy–sell swap scheduled for December 16. The announcement was made through a circular released on Monday.
The swap will have a tenor of 36 months, with the auction taking place between 10:30 a.m. and 11:30 a.m. The near-leg settlement is set for December 18, 2025, and the far-leg settlement for December 18, 2028. Eligible participating banks will quote swap premiums in paisa, and the auction will be conducted on a multiple-price basis.
RBI to Conduct ₹1 Lakh Crore OMO Purchases
The RBI will also carry out Open Market Operations (OMO) purchase auctions of Government of India securities totalling ₹1,00,000 crore. These purchases will take place in two tranches of ₹50,000 crore each on December 11 and December 18, 2025. The measures form part of the central bank’s approach to maintain stable funding conditions toward the end of the year.
Category-I Authorised Dealer banks may participate in the swap auction and can submit multiple bids, each amounting to at least $10 million. Successful bidders will provide US dollars to the RBI’s nostro account in exchange for rupee liquidity at the start of the swap. At maturity, the dollars will be returned to the banks, who will repay the rupee amount along with the agreed swap premium. The RBI stated that the final accepted amount may vary slightly from the announced $5 billion, depending on market conditions.
Summary
- RBI will conduct a $5 billion USD/INR buy–sell swap on December 16 with a 36-month tenor.
- Near-leg settlement: December 18, 2025; far-leg settlement: December 18, 2028.
- Multiple-price auction; bids in paisa; Category-I Authorised Dealer banks eligible.
- RBI to purchase Government securities worth ₹1 lakh crore through OMOs in two tranches of ₹50,000 crore on December 11 and 18, 2025.
- Measures aim to provide long-term rupee liquidity; final swap size may be adjusted based on market conditions.
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