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Business Recorder
6 days ago
- Business
- Business Recorder
India central bank delivers maturing $5 billion dollar-rupee swap, bankers say
MUMBAI: The Reserve Bank of India will deliver a $5 billion dollar-rupee swap maturing on Monday, with surplus rupee liquidity in the banking system leaving little need for a rollover, four bankers said. Delivering the swap without a rollover implies the RBI is selling dollars and absorbing rupees from the banking system — a move unlikely to disrupt money markets, with rupee liquidity currently in surplus, bankers said, requesting anonymity since they are not authorized to speak to the media. The $5 billion buy-sell dollar/rupee six-month swap, which matures on Monday, was part of a series of measures that the central bank had taken to boost rupee liquidity from late January to May. 'The purpose of the swap was to inject INR liquidity,' a senior treasury official at a state-run lender said. At the time of initiating the swap in January, the central bank bought dollars, injecting rupees into the banking system. 'Now with the system running a surplus, settling it won't cause any disruption — and that provides RBI room to deliver it.' India central bank seen holding rates, but US tariffs raise odds of cut India's banking system liquidity surplus has risen to over 3.60 trillion Indian rupees ($41.2 billion) — the highest in four weeks and equivalent to around 1.5% of total deposits. RBI head Sanjay Malhotra had indicated in April that the central bank is looking at keeping surplus levels around 1% of deposits. 'The central bank will not roll over the swap,' said VRC Reddy, treasury head at Karur Vysya Bank, 'At this juncture, rupee liquidity is very comfortable, and it makes sense for the central bank to deliver the dollars.' Further, a swap trader at a mid-sized private sector bank said he had not seen or heard of any large-sized buy/sell swaps being conducted through state-run banks — a development that would typically accompany a rollover by the RBI. Dollar-rupee near-term swaps showed no signs of disruption from the maturity of the RBI's swap. The cash-tomorrow swap was quoted at 0.34/0.35 paisa, implying an annualised yield of around 5.8% — only marginally above the interbank call rate.
Mint
7 days ago
- Business
- Mint
India central bank delivers maturing $5 billion dollar-rupee swap, bankers say
(Corrects typographical error in media packaging code, no changes to text) MUMBAI, Aug 4 (Reuters) - The Reserve Bank of India will deliver a $5 billion dollar-rupee swap maturing on Monday, with surplus rupee liquidity in the banking system leaving little need for a rollover, four bankers said. Delivering the swap without a rollover implies the RBI is selling dollars and absorbing rupees from the banking system — a move unlikely to disrupt money markets, with rupee liquidity currently in surplus, bankers said, requesting anonymity since they are not authorized to speak to the media. The $5 billion buy-sell dollar/rupee six-month swap, which matures on Monday, was part of a series of measures that the central bank had taken to boost rupee liquidity from late January to May. "The purpose of the swap was to inject INR liquidity," a senior treasury official at a state-run lender said. At the time of initiating the swap in January, the central bank bought dollars, injecting rupees into the banking system. "Now with the system running a surplus, settling it won't cause any disruption — and that provides RBI room to deliver it." India's banking system liquidity surplus has risen to over 3.60 trillion Indian rupees ($41.2 billion) — the highest in four weeks and equivalent to around 1.5% of total deposits. RBI head Sanjay Malhotra had indicated in April that the central bank is looking at keeping surplus levels around 1% of deposits. "The central bank will not roll over the swap," said VRC Reddy, treasury head at Karur Vysya Bank, "At this juncture, rupee liquidity is very comfortable, and it makes sense for the central bank to deliver the dollars." Further, a swap trader at a mid-sized private sector bank said he had not seen or heard of any large-sized buy/sell swaps being conducted through state-run banks — a development that would typically accompany a rollover by the RBI. Dollar-rupee near-term swaps showed no signs of disruption from the maturity of the RBI's swap. The cash-tomorrow swap was quoted at 0.34/0.35 paisa, implying an annualised yield of around 5.8% — only marginally above the interbank call rate. ($1 = 87.4050 Indian rupees) (Reporting by Nimesh Vora; additional reporting Dharamraj Dhutia; Editing by Ronojoy Mazumdar)
Time of India
7 days ago
- Business
- Time of India
RBI to settle $5 billion dollar-rupee swap without rollover, say bankers
The Reserve Bank of India will deliver a $5 billion dollar-rupee swap maturing on Monday, with surplus rupee liquidity in the banking system leaving little need for a rollover, four bankers said. Delivering the swap without a rollover implies the RBI is selling dollars and absorbing rupees from the banking system - a move unlikely to disrupt money markets, with rupee liquidity currently in surplus, bankers said, requesting anonymity since they are not authorized to speak to the media. Explore courses from Top Institutes in Please select course: Select a Course Category The $5 billion buy-sell dollar/rupee six-month swap, which matures on Monday, was part of a series of measures that the central bank had taken to boost rupee liquidity from late January to May. "The purpose of the swap was to inject INR liquidity," a senior treasury official at a state-run lender said. At the time of initiating the swap in January, the central bank bought dollars, injecting rupees into the banking system. "Now with the system running a surplus, settling it won't cause any disruption - and that provides RBI room to deliver it." Live Events India's banking system liquidity surplus has risen to over 3.60 trillion Indian rupees ($41.2 billion) - the highest in four weeks and equivalent to around 1.5% of total deposits. RBI head Sanjay Malhotra had indicated in April that the central bank is looking at keeping surplus levels around 1% of deposits. "The central bank will not roll over the swap," said VRC Reddy, treasury head at Karur Vysya Bank , "At this juncture, rupee liquidity is very comfortable, and it makes sense for the central bank to deliver the dollars." Further, a swap trader at a mid-sized private sector bank said he had not seen or heard of any large-sized buy/sell swaps being conducted through state-run banks - a development that would typically accompany a rollover by the RBI. Dollar-rupee near-term swaps showed no signs of disruption from the maturity of the RBI's swap. The cash-tomorrow swap was quoted at 0.34/0.35 paisa, implying an annualised yield of around 5.8% - only marginally above the interbank call rate. ($1 = 87.4050 Indian rupees)
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Business Standard
17-07-2025
- Business
- Business Standard
RBI to hold ₹2 trillion 7-day VRRR auction to absorb surplus liquidity
The Reserve Bank of India (RBI) plans to conduct a seven-day Variable Rate Reverse Repo (VRRR) auction on Friday to absorb Rs 2 trillion from the banking system. Despite a series of VRRR auctions, net liquidity in the system remains in surplus of more than Rs 3 trillion. The net liquidity in the banking system was in a surplus of Rs 3.11 trillion on Wednesday, latest RBI data showed. 'There is a reversal of around Rs 2.07 trillion on Friday, that's why the RBI is conducting the Rs 2 trillion VRRR auction. The objective of the RBI is to align overnight rates with the repo rate,' said V R C Reddy, Head of Treasury, Karur Vysya Bank. 'I doubt it will be fully subscribed given that we have around Rs 1.2 trillion of GST outflows coming up,' he added. A net surplus liquidity of around Rs 3 trillion in the banking system has largely kept the overnight Weighted Average Call Rate (WACR) near the Standing Deposit Facility (SDF) rate of 5.25 per cent and below the repo rate of 5.50 per cent, with Tri-party Repo (TREPS) rates also slipping below the SDF. The overnight WACR settled at 5.35 per cent, against the previous day's close of 5.36 per cent, while the overnight TREPS rate settled at 5.28 per cent, unchanged from Wednesday. WACR is the operating target of monetary policy, which the central bank aims to keep close to the repo rate. The RBI had received bids worth Rs 57,450 crore in its three-day VRRR auction on Tuesday, against the notified amount of Rs 1 trillion. Market participants said banks were reluctant to park larger amounts at the auction due to the fortnightly reporting period at the end of the current week. There was also uncertainty over the quantum and tenor of upcoming VRRRs. As banks have already parked Rs 1.5 trillion at the seven-day VRRR auction on Friday, they were unwilling to lock in more funds. The RBI's VRRR operations are aimed at absorbing surplus liquidity from the system and anchoring short-term rates closer to the policy repo rate.
Time of India
11-07-2025
- Business
- Time of India
RBI to conduct 7-day VRRR for Rs 2.5 lakh crore today
Mumbai: The Reserve Bank of India ( RBI ) will conduct a seven-day variable rate reverse repo (VRRR) operation for ₹2.5 lakh crore on Friday, a day when two previous such operations involving a total of nearly ₹2 lakh crore would be reversed and returned to the banking system. Friday is also the end of the fortnight, when banks need to report their cash reserve ratio compliance to the Reserve Bank of India (RBI). Bank treasury officials said that the aim of this exercise is to keep weighted average call rate (WACR) and the TREPS rate within the liquidity adjustment facility (LAF) corridor. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Is it legal? How to get Internet without paying a subscription? Techno Mag Learn More Undo VRRR does not permanently remove liquidity, but increases cost of liquidity, thus pushing up overnight rates. The operations planned for Friday will be reversed on July 18, the next Friday. "The primary intent of the VRRR exercise is to keep overnight rates well within the LAF corridor, thereby supporting effective transmission of the recent policy rate cuts. The move also aligns with the RBI's operational objective of maintaining system liquidity surplus around 1% of NDTL, which works out to around ₹2.5 lakh crore," said V RC Reddy, head of treasury, Karur Vysya Bank .
