BE/RBINOTE/15/2019
Swapping Arrangement
- Reserve Bank of India, the country’s regulator has announced that it will be injecting a long-term liquidity worth USD 5 billion into the system.
- This will be done through a Foreign Exchange Swap arrangement with banks for three years.
- The Swap will be in the nature of a simple buy/sell foreign exchange swap from the Central Bank’s side.
Modus operandi
- Under the SWAP system, a bank would sell US dollars to the RBI and
- Simultaneously agree to buy the same amount of US dollars at the end of Swap period.
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