RBI announces $5 billion dollar–rupee swap auction to stabilise currency
The Reserve Bank of India (RBI) has announced a **$5 billion Buy–Sell dollar–rupee swap auction** to be conducted on 16 December 2025.[4] The move follows the rupee breaching the psychologically important level of **₹90 per US dollar**, raising concerns over imported inflation and external stability.[4] In a Buy–Sell swap, RBI buys dollars from banks now and agrees to sell them back later, providing rupee liquidity in the short term while preserving headline foreign exchange reserves.[4] RBI had used a similar instrument earlier in 2025 to curb volatility, indicating that currency management remains an active policy tool beyond conventional spot market intervention.[4] The auction will be conducted via multiple-price auction among eligible banks, and its outcome will be closely watched by markets for signals on RBI’s tolerance band for the rupee. The step is part of RBI’s broader toolkit that includes interest rate policy, open market operations, and macroprudential regulations. For banking exams, understanding FX swap mechanics, rupee levels, and their macro impact is critical.
प्रश्न हल करें
The primary objective of RBI’s $5 billion Buy–Sell dollar–rupee swap announced for December 16, 2025 is to
उत्तर: (b) Stabilise the rupee without depleting FX reserves
The correct answer is (b) Stabilise the rupee without depleting FX reserves.