RBI to Inject Liquidity Through $5 Billion USD-INR Buy or Sell Swap Auction on May 26, 2026, for 3-Year Period

The Reserve Bank of India (RBI) has announced a $5 billion USD/INR buy/sell swap auction scheduled for May 26, 2026. This move aims to manage liquidity conditions over a 3-year period. 

Details of the Swap Auction 

The RBI will conduct the swap auction with a total amount of $5 billion. The auction will take place on May 26, 2026, from 10:30 AM to 11:30 AM.  

The near leg or spot date is set for May 29, 2026, while the far leg date is May 29, 2029. Participants must bid in terms of the premium they are willing to pay, expressed in paisa terms up to 2 decimal places.  

The auction will be a multiple price-based auction, with successful bids accepted at their respective quoted premiums. 

Eligibility and Bidding Process 

Only Authorised Dealers Category-I (AD Category-I) banks are eligible to participate. The swap involves banks selling USD to the RBI and agreeing to buy back the same amount at the end of the swap period.  

The minimum bid size is $10 million, with increments in multiples of $1 million. Participants can submit multiple bids, but the total should not exceed the notified amount. 

Read More: RBI Decides Against Extra Capital Buffer for Banks! 

Operational Guidelines and Settlement 

In the first leg of the transaction, banks will sell USD to the RBI at the FBIL Reference Rate of the auction date.  

The settlement will occur on a spot basis, with the RBI crediting rupee funds to the bidder's current account.  

In the reverse leg, rupee funds must be returned to the RBI along with the swap premium to reclaim the USD. The auction results will be announced on the same day. 

Conclusion 

The RBI's $5 billion USD/INR buy/sell swap auction is a strategic move to manage liquidity conditions over a 3-year period. This initiative reflects the central bank's efforts to stabilise the financial market. 

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