The settlement of the first phase of the FX swap will take place on Friday, which will see the RBI inject rupee liquidity into the banking system. | Photo credit: REUTERS/FRANCIS MASCARENHAS
The central bank accepted 42 bids in the FX swap auction, setting the premium limit at ₹7.28 rupees. A total of 348 bids worth $29.94 billion were received.
Bankers had expected robust demand as companies sought to hedge their foreign borrowings and take advantage of an attractive gap between onshore and offshore swap rates.
The settlement of the first phase of the FX swap will take place on Friday, which will see the RBI inject rupee liquidity into the banking system. The transaction will be reversed three years later. The swap is part of the central bank’s measures to inject $32 billion of liquidity into the banking system, aimed at boosting the transmission of interest rate cuts.
Despite the Reserve Bank of India cutting its policy rate by a total of 125 basis points in 2025, the yield on India’s 10-year government bond fell by only 17 basis points over that period.
The Sanjay Malhotra-led RBI has been aggressive in injecting liquidity, although some of the infusions have been diluted by currency intervention to support the rupee, Asia’s worst-performing currency last year.
Published on January 13, 2026
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