RBI may intervene in forward forex markets: source

Mumbai: The Reserve Bank of India (RBI) may intervene in the forward foreign exchange market, in addition to the spot market, to help manage liquidity in the banking system, a central bank source told Reuters on Friday.

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“If and when we are doing it (intervention), we may do a combination of spot and forwards so liquidity impact is shifted to a future date,” the source said.

Banks borrowed 1.59 trillion rupees from the RBI’s repo window on Friday, compared with 1.45 trillion rupees on Wednesday, and significantly higher than the RBI’s comfort zone of 600 billion rupees, indicating the tightness in liquidity.

Reuters