India’s central bank deploys a $5bn USD/INR swap and signals broader measures to curb currency depreciation and stabilize liquidity.
The Reserve Bank of India intervened as the rupee approached a record low of 97 per USD, announcing a $5bn USD/INR buy/sell swap to manage liquidity and forward premiums. The move aims to slow the currency’s decline after it neared historic lows this week.
Earlier corrections were seen as a shock absorber for macroeconomic shifts, but unchecked depreciation risks reinforcing further weakness. The RBI also signaled potential rate hikes, additional FX swaps, and special deposit schemes to attract inflows and support the rupee.
Authorities may tighten scrutiny on outbound foreign direct investment and encourage exporters to repatriate proceeds to onshore markets. The measures reflect concerns over external account imbalances and currency stability.