USD/INR swap auction: Participants place bids for twice the $5 b notified amt
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The swap auction aimed to strengthen the RBI’s capacity to act in the forex market | Photo Credit:
PRAKASH SINGH
The three‑year USD/INR buy‑sell swap auction held by the RBI on Tuesday attracted strong interest, with market participants submitting offers totalling $9.8 billion against the announced target of $5 billion.
The purpose of the auction was to enhance the RBI’s toolkit for intervening in the foreign‑exchange market, thereby curbing unwarranted rupee fluctuations.
From the RBI’s perspective the transaction is a straightforward buy/sell FX swap: a bank sells dollars to the RBI and agrees to repurchase the same dollar amount when the swap matures.
Of the 254 bids received, the RBI accepted 141, and the weighted‑average premium on the accepted bids worked out to 920.64 paise.
In a USD/INR swap auction, participants quote a premium (expressed in paise per dollar) for exchanging the spot and forward legs of the currency pair.
The rupee touched a record low of 96.83 for the close and 96.95 intraday versus the dollar on May 20, but has since recovered to trade below the 96 mark.
Published on May 26, 2026
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