Dollar Swap Window

  • IASbaba
  • March 13, 2020
  • 0
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Dollar Swap Window

Part of: GS Prelims and GS-III- Economy

In News:

  • The Reserve Bank of India (RBI) has opened a six-month dollar sell-buy swap window to pump liquidity in the foreign exchange market
  • Financial markets worldwide are facing intense selling pressures on extreme risk aversion due to the spread of COVID-19 infections, compounded by the slump in international crude prices.
  • Investors dump assets in their flight to safety and thus the demand for the US dollar has been surging across the word resulting in USD shortage.
  • As a result, several emerging market currencies including INR experiencing downside pressures.
  • The central bank is set to auction $2 billion where banks can deposit Indian rupees to get US dollar for a price. These funds would be available for six months

Did You Know? 

  • The Indian rupee has fallen 4.07% this year as foreign investors sell domestic securities aggregating Rs. Rs. 23,237 crores. It has aggravated in the past two weeks as the pandemic panic spread.
  • The current account is expected to move to surplus in the March quarter due to a plunge in crude oil prices

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