what is foreign exchange swap rate of rbi?
Answers
Under the buy/sell foreign exchange swap, a bank will sell dollars to the RBI and simultaneously agree to buy the same amount of dollars at the end of the swap period. The cut-off (forward) premium for three years came in at 776 paisa. The weighted average premium of the accepted offers was at 791.88 paisa
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Under the buy/sell foreign exchange swap, a bank will sell dollars to the RBI and simultaneously agree to buy the same amount of dollars at the end of the swap period.
The cut-off (forward) premium for three years came in at 776 paisa. The weighted average premium of the accepted offers was at 791.88 paisa. The transaction, which was announced on March 13 and conducted on Tuesday, was spot (market) neutral, said dealers.
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The dollar amount mobilised through the auction would reflect in the RBI’s foreign exchange reserves for the tenor of the swap as also in the RBI’s forward liabilities. “Apart from diversifying liquidity-infusion efforts, this measure is expected to ease longer-tenor forward premia, helping to lower hedging costs.
“This is opportune considering recent changes to external commercial borrowing limits, particularly for state-owned oilers and NBFCs, introduction of the voluntary retention route for portfolio investors and better foreign flows,” said Radhika Rao, Senior Vice-President, DBS Bank Ltd.