Mumbai: The Reserve Bank of India (RBI) on Tuesday said it has raised $5 billion through the second tranche of the forex swap auctions, which saw an increased response--nearly over three-times the offer of $5 billion at $18.65 billion--from banks compared to the maiden auctions on held on 26 March.
The central bank introduced the tool, wherein it buys dollars from banks for three years and offer them rupees in return, last month to bridge the liquidity gap.
In the latest auctions on Tuesday, the total amount offered stood at $18.65 billion against an offer of $5 billion, through 255 offers, as against $16.31 billion from 240 offers in the earlier instance, the RBI said in a statement.
The cut-off premium was 838 paise as against 776 paise in the first auction.
The swap will bulk up the forex reserves on one hand and on the other injects liquidity into the financial system to ease the ongoing cash crunch typically seen before the beginning of a financial year.
The liquidity deficit is too bad this time around also because of the ongoing hustings to elect the 17th Parliament.
For the week to 19 April, the forex kitty stood at around $415 billion, inching closed to the lifetime peak of a tad over $426 billion on 13 April, 2018.
The auction came on a day when the RBI announced to mop up Rs 25,000 crore from the conventional open market operations route in May.
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Updated Date: Apr 24, 2019 08:02:48 IST