RBI to inject liquidity via USD 5 billion long-term swap auction

The RBI will inject liquidity into the banking system through a 36-month, USD 5 billion USD/INR Buy/Sell Swap auction on Dec 16, 2025. This is part of a broader plan that also includes Rs 1,00,000 crore in OMO purchases.

RBI Announces USD/INR Swap Auction to Boost Liquidity

The Reserve Bank of India is set to inject liquidity into the banking system through a long-term USD/INR Buy/Sell Swap auction, marking a key move to ease financial conditions at a time when liquidity needs closer attention.

According to an RBI press release on Monday, the central bank will hold a 36-month swap auction of USD 5 billion on December 16, 2025.

Auction Mechanics and Bidding Details

In the swap auction, market participants will submit bids based on the premium they decide to pay to the Reserve Bank for the entire three-year tenor. The premium must be quoted in paisa terms up to two decimal places. The cut-off will be set according to the premium received, and successful bids will be accepted at the exact premium quoted, as the auction follows a multiple-price format. "The market participants would be required to place their bids in terms of the premium that they are willing to pay to the Reserve Bank for the tenor of the swap, expressed in paisa terms up to two decimal places," it said.

The auction's near leg, or spot date, is scheduled for December 18, 2025, while the far leg, when the swap unwinds, falls on December 18, 2028.

Broader Liquidity Plan for December

The operation comes as part of a broader liquidity plan for December 2025. Earlier on Friday, the RBI, after reviewing current financial conditions, decided to conduct several measures to support orderly liquidity. It stated that two Open Market Operation (OMO) purchase auctions of Government of India securities worth a total of Rs 1,00,000 crore will take place on December 11 and December 18, with each tranche carrying Rs 50,000 crore. The USD/INR swap on December 16 forms the second leg of this effort. It notes that detailed instructions for each operation will be issued separately, ensuring participants have clarity in the bidding process.

RBI to Continue Monitoring Market Conditions

"The Reserve Bank will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly liquidity conditions," the RBI press release said on Friday. (ANI)

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