RBI injects billions into liquidity-strapped financial system
Analysts say decision points to rate cut by India’s central bank in February
The Reserve Bank of India on January 27 announced plans to inject liquidity into the banking system through bond purchases and an auction of $5 billion in dollar/rupee swaps.
The RBI said the “simple buy/sell foreign exchange swap” would involve commercial banks selling it US currency while agreeing to buy back the same amount of dollars at the end of six months.
The minimum bid on the auction will be $10 million, and will rise in increments of $1 million.
As of January 27, the RBI had injected 3.1
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