The Reserve Bank of India's (RBI's) USD/INR buy/sell swap auction on Tuesday received robust responses with nearly twice subscriptions than the notified amount.
The central bank received bids worth $9.80 billion, but accepted just $5 billion for a cut-off premium of 910 paise, according to the RBI's release. The notified amount of the auction was $5 billion.
The release said the RBI received 254 bids at the auction and accepted 144 bids. The bid-to-cover ratio stood at 1.96.
The partial allotment as percentage of competitive bids at cut-off premium stands at 18.10%, the RBI said.
The auction will have an initial leg on May 29, and the second leg, which is a reversal of funds, will be on May 29, 2029.
In the first leg of the transaction, banks will sell US dollars to the Reserve Bank at FBIL reference rate of the auction date.
The settlement of the first leg of the swap will take place on-spot basis from the date of transaction and the Reserve Bank will credit the rupee funds to the current account of the successful bidder and the bidder needs to deliver US dollars into the RBI's nostro account.
In the reverse leg of the swap transaction, rupee funds will have to be returned to the Reserve Bank, along with the swap premium, to get the US dollars back.
Currently, the liquidity in the banking system is estimated to be in surplus of around Rs 67,285.42 crore as on May 25, as per the RBI's data.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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