RBI Swap Won't Curb Rupee Volatility; Focus on Liquidity

• RBI announced a $5-billion USD/INR Buy/Sell swap auction for December 16.
• The swap aims to ease liquidity pressures in the banking system, not to curb rupee volatility.
• Experts estimate the auction will inject approximately Rs 45,000 crore liquidity into the banking system.
• The Indian rupee hit an all-time low, crossing 90 against the USD, due to equity outflows and trade deal uncertainty.
• The rupee is among the worst-performing Asian currencies, depreciating 4.87% between Dec 31, 2024, and Dec 5, 2025.

Why It Matters: RBI's swap won't stabilize the rupee, indicating continued currency volatility.