RBI buys over one-year forward $ to limit swap outflow impact in 2016
The Reserve Bank of India (RBI), perhaps for the first time in many years, has booked dollar/rupee forwards exceeding one-year tenure of up to $3.04 billion during July and August, data from the central bank showed. This could be a hedge for the dollar outflows that would arise as special swaps with banks mature after September 2016. In September 2013, the central bank had prodded banks to raise dollars through foreign currency non-resident deposits and capital by giving them attractive swap rates to bring in the dollars. This move was to counter the massive dollar outflows that dragged the rupee to an all-time low of 68.85/$ in August and to stabilize the currency as well.
Source: Latest News