RBI to continue interventions in forex market, despite tight liquidity
2 months, 1 week ago

RBI to continue interventions in forex market, despite tight liquidity

Live Mint  

Tight liquidity will not bind the Reserve Bank of India’s hands in intervening to curb excessive rupee volatility in the forex market, said a senior official aware of the thinking at the central bank. While liquidity management will not be a constraint for RBI to intervene in the forex market, bankers believe that the central bank will have to infuse long term durable liquidity. Bankers have suggested liquidity measures like forex swaps or open market operations by buying and selling government securities in the open market or through a cut in cash reserve ratio —the proportion of deposits that banks must keep with the RBI in cash. In December 2023 IMF had reclassified India's "de facto" exchange rate regime to "stabilized arrangement" from "floating" for December 2022 to October 2023, following RBI's likely forex interventions where the rupee traded in a “very narrow range".

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History of this topic

India’s forex reserves hit $654 billion to record biggest weekly gain in 3 years driven by RBI’s liquidity boost
1 week, 4 days ago

India’s forex reserves hit $654 billion to record biggest weekly gain in 3 years driven by RBI’s liquidity boost

Live Mint  

India’s dollar stockpile had its biggest weekly gain in over three years, bolstered by the Reserve Bank of India 's currency swap operations and liquidity boost last month. This comes after the RBI injected $10 billion through a foreign-exchange swap auction on February 28, stepping up efforts to ease a crunch in the financial system. RBI liquidity boost RBI injected …

Govt wants rupee stability; RBI may again aggressively defend the currency
2 weeks, 1 day ago

Govt wants rupee stability; RBI may again aggressively defend the currency

Live Mint  

Mumbai/New Delhi: The Reserve Bank of India is expected to continue defending the rupee, with the government expressing confidence that the central bank's strategic interventions would stagger the pace of slide, according to a senior official. There is no change in the forex policy of the central bank despite several quarters believing that under the new governor Sanjay Malhotra, RBI …

RBI’s FX swap auction sees strong demand as system liquidity deficit persists
Trending News
3 weeks, 4 days ago

RBI’s FX swap auction sees strong demand as system liquidity deficit persists

Live Mint  

Mumbai: The Reserve Bank of India today saw strong demand its foreign currency buy/sell swap auction amid persistently tight liquidity deficit in the banking system. RBI will try to keep deficit in the system around ₹1-1.5 trillion and will use instrument like OMO buy/ Fx swap and if needed may be CRR as well,” Gopal Tripathi, President and Head, Treasury …

RBI injects $10 billion via currency swap to ease liquidity deficit in financial system: Report
Trending News
3 weeks, 4 days ago

RBI injects $10 billion via currency swap to ease liquidity deficit in financial system: Report

Live Mint  

The Reserve Bank of India injected $10 billion through a currency or foreign-exchange swap auction on Friday, stepping up efforts to ease one of the worst liquidity deficits to hit the country's financial system. The cash crunch has been caused partly by the central bank’s intervention in the foreign exchange market to shield the rupee from global volatility amid US …

​Necessary infusion: on the RBI’s currency swap
1 month ago

​Necessary infusion: on the RBI’s currency swap

The Hindu  

The Reserve Bank of India’s recent decision to inject an additional $10 billion into the financial system through a dollar/rupee swap auction is a timely measure aimed at addressing long-term liquidity concerns among domestic lenders. These concerns stem from a flight of foreign capital from Indian stock markets, as investors seek better returns in the United States amid President Donald …

RBI to conduct USD-INR swap auction of $10 bn for 3 years’ tenor to inject liquidity
1 month ago

RBI to conduct USD-INR swap auction of $10 bn for 3 years’ tenor to inject liquidity

The Hindu  

To meet durable liquidity needs of the banking system, the Reserve Bank of India has decided to inject rupee liquidity for longer duration through long-term USD-INR buy/sell swap auction. Once the auction window is closed, all the bids would be arranged in descending order of the swap premium quoted and the cut-off premium would be arrived at the premium corresponding …

RBI to conduct $10 billion forex currency exchange to infuse liquidity in India’s banking system
1 month ago

RBI to conduct $10 billion forex currency exchange to infuse liquidity in India’s banking system

Live Mint  

MUMBAI - The Reserve Bank of India will conduct a massive $10 billion three-year dollar/rupee swap auction next week to infuse durable rupee liquidity into the banking system, which has been reeling under large cash deficits, the central bank said on Friday. "The three-year maturity of the swap indicates that the RBI is looking at injecting more durable liquidity in …

RBI pumps in Rs 45 trillion in banking system since December to meet liquidity needs
1 month ago

RBI pumps in Rs 45 trillion in banking system since December to meet liquidity needs

New Indian Express  

MUMBAI: The Reserve Bank has injected a whopping Rs 45 trillion into the banking system since the December 6 monetary policy review when it slashed the cash reserve ratio by 50 bps to 4%, releasing Rs 1.16 trillion into the system. Of the total, more than Rs 43 trillion of fresh liquidity has flown into the system between December 11 …

Liquidity support is priority; rate cut a close call
1 month, 2 weeks ago

Liquidity support is priority; rate cut a close call

Live Mint  

The backdrop of the monetary policy committee meeting later this week is a complex one. So, the MPC must decide whether to stay cautious given the high retail inflation prints in recent months or deliver a rate cut relying on the RBI’s forecast of benign future inflation—overall, it seems to be a close call in February, rather than being a …

RBI’s ₹1.5 trillion liquidity boost: How will it help?
Trending News
1 month, 3 weeks ago

RBI’s ₹1.5 trillion liquidity boost: How will it help?

Live Mint  

The Reserve Bank of India has announced a set of forex and money market measures that will collectively infuse ₹1.5 trillion over time, amid a clamour for liquidity from multiple bankers and money market participants. Average liquidity deficit in the interbank market crossed ₹3.3 trillion last week, thanks to heavy goods and services tax outflows. The liquidity deficit has been …

RBI announces steps to inject liquidity in banking system
1 month, 3 weeks ago

RBI announces steps to inject liquidity in banking system

The Hindu  

The Reserve Bank of India on Monday said it will purchase government securities worth ₹60,000 crore in three tranches and announced several other steps to inject liquidity into the banking system. As part of measures to manage liquidity conditions, the central bank also announced a USD/INR Buy/Sell Swap auction of $5 billion for a tenor of six months to be …

India’s RBI to ‘Play it Slow’ on Defending Rupee, Axis Bank CEO Says
2 months ago

India’s RBI to ‘Play it Slow’ on Defending Rupee, Axis Bank CEO Says

Live Mint  

-- India’s central bank is unlikely to mount a strong defense of the rupee despite the currency’s sharp depreciation, according to Axis Bank Ltd.’s chief executive officer. Chaudhry said he isn’t hopeful of major fiscal support measures in India’s annual budget scheduled to be presented next month, since the government is committed to reducing the fiscal deficit. “You need to …

Forex interventions effectively countered capital flows volatility, says RBI study
2 months, 1 week ago

Forex interventions effectively countered capital flows volatility, says RBI study

The Hindu  

Foreign exchange interventions by the central bank effectively countered capital flows volatility -- the main source of exchange rate volatility in India, a study published in the Reserve Bank's latest Bulletin said. The study titled 'Foreign Exchange Intervention: Efficacy and Trade-offs in the Indian Experience', investigates the effectiveness of forex interventions undertaken by the Reserve Bank of India. "Foreign exchange …

India’s forex reserves lowest in 10 months after rupee crashes to all-time low of 86.04 against US dollar
2 months, 2 weeks ago

India’s forex reserves lowest in 10 months after rupee crashes to all-time low of 86.04 against US dollar

Live Mint  

India's foreign exchange reserves plunged for the fifth consecutive week to hit a 10-month low of $634.59 billion as of January 3. Data from the Reserve Bank of India showed on Friday that the forex kitty declined by $5.7 billion in the reported week after falling by a cumulative $17.8 billion in the previous three weeks. Forex reserves have been …

India’s Central Bank dials down use of NDFs to fight Dollar
3 months, 1 week ago

India’s Central Bank dials down use of NDFs to fight Dollar

Live Mint  

India’s central bank has started to rein in its ballooning non-deliverable forwards book, according to people familiar with the matter, shifting away from one of its key tools to push back against the strong dollar. The Reserve Bank of India has recently let some short dollar positions in the overseas market expire without rolling into new contracts, the people said, …

Indian rupee to face renewed pressure as US yields climb
3 months, 1 week ago

Indian rupee to face renewed pressure as US yields climb

Live Mint  

By Nimesh Vora MUMBAI, Dec 16 - The Indian rupee, having witnessed slight relief late last week, is likely to come under renewed strain on Monday on the back of a further rise in U.S. Treasury yields. "With inflation remaining sticky, and President-elect Trump looking to strengthen the U.S. growth performance, the Fed is set to signal a more cautious …

Rupee hits record low, RBI intervention counters bearish tilt
3 months, 1 week ago

Rupee hits record low, RBI intervention counters bearish tilt

Live Mint  

By Jaspreet Kalra MUMBAI, Dec 12 - The Indian rupee fell to an all-time low on Thursday, pressured by a lingering depreciation bias and heightened demand for the U.S. dollar in the non-deliverable forwards market, while the central bank's intervention helped prevent sharp losses. The dollar index was little changed at 106.5, unfazed by the elevated odds of a December …

RBI Is Said to Shore Up Banking Liquidity Before Rate Decision
3 months, 2 weeks ago

RBI Is Said to Shore Up Banking Liquidity Before Rate Decision

Live Mint  

-- India’s central bank has been shoring up banking system liquidity ahead of a key policy decision, having depleted it in recent days in its efforts to stabilize the rupee, according to people familiar with its transactions. The moves come at a time when the slowest pace of economic expansion in almost two years is mounting pressure on central bank …

RBI Intervenes To Support Rupee Amid Record Low, Conducts Dollar-Rupee Swaps
3 months, 3 weeks ago

RBI Intervenes To Support Rupee Amid Record Low, Conducts Dollar-Rupee Swaps

ABP News  

The Reserve Bank of India is actively intervening in the forex market, conducting dollar-rupee buy/sell swaps in mid-to-far tenors on Wednesday, according to four traders cited by Reuters. The RBI's actions have impacted the dollar-rupee forward premiums, with the 1-year implied yield dropping to a four-month low of 1.97 per cent. By using buy/sell swaps in the forward market, the …

RBI can spend $30 billion of forex reserves to defend rupee: Deutsche Bank
1 year, 6 months ago

RBI can spend $30 billion of forex reserves to defend rupee: Deutsche Bank

Live Mint  

Deutsche Bank Thursday said the Reserve Bank of India can spend up to $30 billion from the over $594 billion of forex reserves to defend the domestic currency and even though the country will be left sufficient reserves to take care of import bills for next ten months, reported PTI. The German brokerage said the Indian rupee is trading close …

RBI may buy $18 bn of bonds to boost liquidity, says B. Prasanna of ICICI
1 year, 10 months ago

RBI may buy $18 bn of bonds to boost liquidity, says B. Prasanna of ICICI

Live Mint  

The Reserve Bank of India may buy nearly $18 billion of government bonds to replenish banking liquidity that’s expected to tighten later in the year, according to a report by Bloomberg. The central bank may cut the cash reserve ratio by half a point in the second half of the fiscal and start buying bonds in the December quarter to …

India must prepare to curb volatility risks of international rupee: RBI Deputy Governor
2 years ago

India must prepare to curb volatility risks of international rupee: RBI Deputy Governor

The Hindu  

India needs to gear up to manage the inevitable volatility that will emerge in the foreign exchange market as the country progresses further towards internationalisation of the rupee, a Deputy Governor at the Reserve Bank of India said recently. "It is now widely accepted that while internationalisation and a freer capital account comes with its own set of benefits, it …

RBI should allow gradual rupee weakening, use fx reserves ’judiciously’: CEA
2 years, 4 months ago

RBI should allow gradual rupee weakening, use fx reserves ’judiciously’: CEA

Live Mint  

India's central bank should allow rupee to depreciate gradually and use foreign exchange reserves judiciously, the government's chief economic adviser V. Anantha Nageswaran on Monday. Nageswaran comment on the rupee and foreign exchange reserves is the first official government comment since concerns about dwindling currency reserves emerged earlier this year. India's foreign currency reserves have fallen from a peak of …

Falling reserves and the bogey of the RBI’s role
2 years, 5 months ago

Falling reserves and the bogey of the RBI’s role

The Hindu  

There is a widespread misconception that the Reserve Bank of India has been depleting India’s foreign exchange reserves to defend the rupee. The RBI cannot simply fritter away India’s forex reserves, held mostly in dollars, by charging its “nostro” account with the Federal Reserve Bank of New York, New York. Central bank as regulator, player and jury The RBI’s intervention …

With the rupee under pressure, what next
2 years, 5 months ago

With the rupee under pressure, what next

The Hindu  

Even without getting into any quantitative measure of vulnerability, it is quite clear that the rupee is under pressure. In the last one year, it depreciated by over 10%, has crossed the psychological marker of ₹80 to a dollar, and India’s foreign exchange reserves are down by more than $100 billion. Arguably, the pressure on the rupee has softened, if …

RBI ’correct’ to use forex reserves to tackle rupee volatility: Economic Adviser
2 years, 8 months ago

RBI ’correct’ to use forex reserves to tackle rupee volatility: Economic Adviser

Live Mint  

The Reserve Bank of India is justified in using the country's foreign exchange reserves to smooth out volatility in the rupee's moves against the dollar, a member of the Economic Advisory Council said on Monday. "Longer term, we need to maintain overall macro-stability and allow the cycle to play itself out," said Sanyal, who was previously India's chief economic adviser. …

'No need to be 'overtly' worried about fall in rupee,' says Economic Affairs Secretary Ajay Seth
2 years, 8 months ago

'No need to be 'overtly' worried about fall in rupee,' says Economic Affairs Secretary Ajay Seth

Firstpost  

The rupee for the first time touched a low level of 80 against the US dollar in intra-day spot trading at the interbank foreign exchange market on Monday New Delhi: Economic Affairs Secretary Ajay Seth on Tuesday said that the rupee is managed well and there is nothing to be “overtly” worried about the depreciation in the domestic currency against …

Explainer | The free fall of the rupee
2 years, 8 months ago

Explainer | The free fall of the rupee

The Hindu  

The story so far: The Indian rupee hit an all-time low against the U.S. dollar this week weakening past the 79 rupees to a dollar mark and selling as low as 79.05 against the dollar on Wednesday. So, for instance, when there is great enthusiasm among foreign investors to invest in India, it can lead to an increase in the …

A currency strategy that’s drawing more hot money to India
4 years, 1 month ago

A currency strategy that’s drawing more hot money to India

Live Mint  

The Reserve Bank of India’s strategy to shift some of its rupee intervention to the forwards market is adding to its problems. Its balancing act to keep the rupee stable amid heavy foreign inflows while also keeping excess liquidity in check is flooding the market with more foreign funds, prompting a vicious cycle of interventions. “The forwards curve has become …

RBI will continue to maintain ample liquidity, says governor Das
4 years, 3 months ago

RBI will continue to maintain ample liquidity, says governor Das

Live Mint  

RBI governor Shaktikanta Das on Friday assured that the central bank will continue to maintain ample liquidity by using various instruments at the appropriate time. Speaking post the 3-day Monetary Policy Committee meeting, Das said that the central bank will continue to use OMO purchases, Operation Twists and reverse repo to maintain this liquidity. This intervention by RBI in both …

Focus on surplus liquidity with rate cut seen remote
4 years, 3 months ago

Focus on surplus liquidity with rate cut seen remote

Live Mint  

With the Reserve Bank of India expected to maintain status quo on benchmark rates in the monetary policy review on Friday, expert opinion is divided on whether the time is ripe for the central bank to absorb surplus liquidity. According to estimates, there is currently ₹5.31 trillion excess liquidity in the banking system following a series of steps by the …

Loose monetary policy is worsening wealth inequality
4 years, 5 months ago

Loose monetary policy is worsening wealth inequality

Live Mint  

The size of the Atmanirbhar Bharat package announced by Prime Minister Narendra Modi in May was estimated to be about ₹20 trillion, or nearly 10% of gross domestic product. Thus, the actual payout from the Centre’s treasury, or the fiscal resources that would flow out, would only occur in cases of delinquency on these loans, which were presumably at least …

RBI opens ₹50,000 liquidity tap for Mutual Funds
4 years, 10 months ago

RBI opens ₹50,000 liquidity tap for Mutual Funds

The Hindu  

The Reserve Bank of India has announced a special window of ₹50,000 crore for mutual funds in view of the redemption pressure that the fund houses are facing. While announcing the window, the RBI said the liquidity stress is limited to high risk debt funds and the larger industry remains liquid. Funds availed under this facility will be used by …

RBI allows banks to trade in offshore rupee derivative market; move will help to contain volatility in domestic currency
4 years, 11 months ago

RBI allows banks to trade in offshore rupee derivative market; move will help to contain volatility in domestic currency

Firstpost  

The Reserve Bank on Friday allowed banks to participate in offshore non-deliverable forward rupee markets with a view to contain volatility in the domestic currency Mumbai: The Reserve Bank on Friday allowed banks to participate in offshore non-deliverable forward rupee markets with a view to contain volatility in the domestic currency. “…the time is apposite to remove segmentation between the …

Reserve Bank of India to sell dollars worth USD 2 billion on Monday to sooth forex market
5 years ago

Reserve Bank of India to sell dollars worth USD 2 billion on Monday to sooth forex market

India TV News  

The Reserve Bank will sell USD 2 billion worth of American currency to banks in a bid to infuse liquidity in the domestic forex market roiled by mounting concerns over coronavirus pandemic and crash in global oil prices. "On a review of current financial market conditions and taking into consideration the requirement of US Dollars in the market, it has …

Global investors keen on rupee denominated assets: RBI
5 years, 6 months ago

Global investors keen on rupee denominated assets: RBI

The Quint  

Mumbai, Aug 26 Global investors have shown appetite for rupee denominated assets in recent times and this trend needs to be strengthened further by policy nudges, Reserve Bank of India Deputy Governor B.P. "The policy regime is also oriented to providing adequate instruments of hedging to all resident economic agents who have exposure to a foreign currency as well as …

Opinion | Why the Reserve Bank is playing with fire with currency swaps
5 years, 10 months ago

Opinion | Why the Reserve Bank is playing with fire with currency swaps

Live Mint  

Important changes are afoot in the Reserve Bank of India liquidity management system, and yet this has elicited relatively little serious analysis or scrutiny. As astutely pointed out by columnist Diva Jain, writing in Business Standard on 23 April, the RBI is operating like a hedge fund, taking on considerable interest rate and exchange rate risk, as defined by both …

RBI announces Rs 25,000 cr liquidity injection in May through OMOs, to be carried out in two tranches
5 years, 11 months ago

RBI announces Rs 25,000 cr liquidity injection in May through OMOs, to be carried out in two tranches

Firstpost  

The RBI has been using OMOs through the prolonged period of weak liquidity starting FY19 itself Mumbai: The Reserve Bank of India on Monday announced a Rs 25,000-crore liquidity injection through purchase of government securities in May. The purchase, called as open market operations, will be undertaken in two equal tranches with the first one on 2 May, the central …

Another $5bn dollar-rupee swap auction on April 23
5 years, 11 months ago

Another $5bn dollar-rupee swap auction on April 23

Deccan Chronicle  

Mumbai: The Reserve Bank of India on Monday said it would conduct another round of dollar-rupee buy-sell swap of $5 billion for a tenure of three years on April 23. “In order to meet the durable liquidity needs of the system, the Reserve Bank has decided to inject rupee liquidity for longer duration through long-term foreign exchange buy/sell swap in …

RBI to inject $5 bn more liquidity through second dollar-rupee swap auction on 23 April
5 years, 11 months ago

RBI to inject $5 bn more liquidity through second dollar-rupee swap auction on 23 April

Firstpost  

Mumbai: The Reserve Bank of India on Monday said it will inject long-term liquidity worth $5 billion into the banking system through dollar-rupee buy-sell swap for a tenure of three years on 23 April, the second such auction within a month. Earlier on 26 March, the central bank had bought $5 billion through similar swap auction in a bid to …

Forex swap auction is a hit, but RBI needs to assess future risk as well
5 years, 11 months ago

Forex swap auction is a hit, but RBI needs to assess future risk as well

Live Mint  

If the maiden foreign exchange swap auction was a test case for performance as a tool for liquidity management, the Reserve Bank of India just got itself a winner. The central bank received bids totalling $16.3 billion at the swap auction where it proposed to buy $5 billion from lenders. Also, getting a three-year swap deal at a relatively cheaper …

RBI will deal with liquidity deficit when needed: Shaktikanta Das
6 years, 2 months ago

RBI will deal with liquidity deficit when needed: Shaktikanta Das

Live Mint  

New Delhi: The Reserve Bank of India will avoid a situation of excess liquidity in the economy and any infusion of liquidity will have to be need-based, RBI governor Shaktikanta Das said on Monday. Therefore, caution and care has to be exercised by RBI so that adverse consequences of excess liquidity are not created,” Das said after meeting representatives of …

RBI to infuse Rs 10,000-cr liquidity into system through open market operations on Thursday
6 years, 3 months ago

RBI to infuse Rs 10,000-cr liquidity into system through open market operations on Thursday

Firstpost  

RBI resorts to purchase of bonds to infuse liquidity in the system while sucks it out by selling the instruments. Mumbai: The Reserve Bank of India will infuse Rs 10,000 crore into the market through open market operations on Thursday. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the Reserve Bank …

RBI will continue to inject liquidity into banking system through OMO purchases till March-end: Viral Acharya
6 years, 3 months ago

RBI will continue to inject liquidity into banking system through OMO purchases till March-end: Viral Acharya

Firstpost  

The RBI had announced that it would conduct purchases of government securities under OMO for an amount of Rs 40,000 crore in December to meet liquidity needs Mumbai: The Reserve Bank of India will continue to inject liquidity into the banking system through open market operation purchases till the end of this fiscal, its deputy governor Viral Acharya said. Late …

RBI not doing enough on liquidity: FinMin official
6 years, 3 months ago

RBI not doing enough on liquidity: FinMin official

The Quint  

New Delhi, Nov 28 A day after the Reserve Bank of India announced to inject additional liquidity of Rs 40,000 crore through purchase of government securities, a senior Finance Ministry official said the central bank is not doing enough. Right now it is so tight, possibly let it all go so that the market gets some extra liquidity," he said …

RBI is a seat belt for liquidity, not the driver
6 years, 3 months ago

RBI is a seat belt for liquidity, not the driver

Live Mint  

The liquidity deficit of the banking system has widened in the last two months and is now estimated to be over ₹ 1 trillion. Some of the demands were that RBI should provide funds to NBFCs through a dedicated window, buy more government bonds from the market to infuse money and even cut the cash reserve ratio. Another drain on …

RBI to inject Rs12,000 crore liquidity on 15 November
6 years, 4 months ago

RBI to inject Rs12,000 crore liquidity on 15 November

Live Mint  

Mumbai: The Reserve Bank on Tuesday announced it will inject Rs12,000 crore into the system through purchase of government securities on 15 November. “Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of the following government securities under Open Market Operations for an aggregate amount …

RBI to infuse liquidity into the market by purchase of government bonds worth Rs 12,000 cr on Thursday
6 years, 5 months ago

RBI to infuse liquidity into the market by purchase of government bonds worth Rs 12,000 cr on Thursday

Firstpost  

This is part of the RBI’s liquidity infusion of a total of Rs 36,000 crore this month, to be held in three phases, through purchase of government bonds in order to meet the festival season demand for funds. Mumbai: The Reserve Bank will infuse liquidity into the market by purchasing government bonds of around Rs 12,000 crore in an auction …

RBI to inject Rs 12,000 cr into system to manage liquidity
6 years, 5 months ago

RBI to inject Rs 12,000 cr into system to manage liquidity

India TV News  

The Reserve Bank Tuesday announced it will inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11 to meet the festival season demand for funds. The auction to purchase government bonds is a part of the Open Market Operations to manage liquidity in the system which seems to be facing liquidity tightness. "Based on …

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