The Reserve Bank of India will conduct auctions of foreign exchange swaps, wherein it will sell dollars for immediate delivery and purchase them for delivery after two years. The central bank will conduct a dollar/rupee sell/buy swap auction of $5 bln for a tenure of two years on March 8. The central bank's move is aimed to extend the maturity profile of its forward book and smoothen the receivables relating to forward assets, the release said.
The auction will be based on the multiple price method. Market participants will have to place a minimum bid of $10 mln and in multiples of $1 mln thereafter, in terms of the premium they are willing to receive from the RBI.