RBI's $10 Billion FX Swap Expected to Succeed Amidst Corporate Demand and Arbitrage
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RBI's $10 Billion FX Swap Expected to Succeed Amidst Corporate Demand and Arbitrage

Bankers anticipate the Reserve Bank of India's (RBI) $10 billion foreign exchange swap to be successful, driven by arbitrage opportunities and increased corporate demand. The operation aims to inject rupee liquidity into the market. This swap, involving the RBI buying dollars and injecting rupees, is expected to attract offshore players due to a 25-30 basis point arbitrage between onshore and offshore rates. Previous swaps had limited corporate participation, but a longer announcement window this time is expected to boost engagement from mid-sized firms.

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