The Reserve Bank of India (RBI) has announced that it will inject long-term liquidity into the banking system by conducting a $5 billion USD/INR buy–sell swap on December 16, according to a circular released on Monday.
The measure comes as liquidity in the financial system remains strained despite recent RBI actions. The swap auction, carrying a tenor of 36 months, will be held between 10:30 a.m. and 11:30 a.m. The near-leg settlement is set for December 18, 2025, while the far-leg will settle on December 18, 2028. Participating banks will compete by quoting the swap premium in paisa, and the auction will follow a multiple-price format.
The RBI has decided to initiate OMO (Open Market Operations) purchase auctions of Government of India securities for an aggregate amount of ₹1,00,000 crore. This will be done in two tranches of ₹50,000 crore each to be held on December 11, 2025, and December 18, 2025. This is part of a coordinated strategy to ensure smooth funding conditions as the year-end approaches.
Category-I Authorised Dealer banks are eligible to participate and may submit multiple bids, each of at least $10 million. Successful bidders will provide dollars to the RBI’s nostro account and, in return, receive rupee liquidity in the initial leg. At maturity, banks will get their dollars back while repaying the rupee amount along with the agreed swap premium.
Also Read: 6 Key SEBI Mutual Fund Updates in 2025 Investors Must Note
The RBI also noted that it may choose to accept slightly more or less than the stated $5 billion, depending on market conditions and its operational discretion.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Dec 10, 2025, 9:47 AM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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