RBI to Inject $10 Billion Liquidity via USD/INR Swap Auction on Jan 13

• RBI announced a $10 billion USD/INR Buy/Sell Swap auction for a three-year tenure.
• The auction is scheduled for January 13, from 10:30 AM to 11:30 AM.
• This mechanism involves RBI buying USD from banks for INR and selling them back at a future date with a premium.
• The move aims to inject durable liquidity into the banking system, estimated at Rs 90,000 crore.
• It is expected to ease overnight rates and improve the transmission of repo rate cuts.

Why It Matters: RBI's $10 billion USD/INR swap auction on Jan 13 will inject significant liquidity, easing rates.