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
