RBI’s Second Dollar-Rupee Swap Auction Receives Overwhelming Response; Forex Reserves Surge To $418.5 Billion
Reserve Bank of India's (RBI) foreign exchange (forex) reserves have surged by $4.387 billion to a total value of $418.515 billion in the week to 26 April 2019, reports Mint.
The development is an outcome of the recently concluded second round of the Dollar-Rupee swap auction arrangement which took place on 23 April 2019. The auction had received a huge response as RBI received bids worth $18.65 billion against a total of $5 billion on offer. The RBI in the end accepted just five bids worth $5 billion.
The RBI had conducted the first round of the Dollar-Rupee swap auction in March 2019 as a nimble approach to boost rupee liquidity in the economy while not impacting the exchange rate against the dollar’s value. The size of the first round too was $5 billion, and it similarly received a rousing response with total bids crossing as much as $16 billion.
It was in response to the tremendously successful first round and the existing need for liquidity in the economy that the RBI led by Governor Shaktikanta Das announced the second round which was eventually carried out on 23 April 2019.
The forex kitty had touched an all time high of $426.028 billion in the week to 13 April, 2018.