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India’s central bank is using dollar-rupee swaps to ease a liquidity squeeze in the country’s financial system, according to people familiar with the matter.
The Reserve Bank of India used swaps to inject rupee liquidity worth around $3 billion on Friday, the people said, asking not to be named because they aren’t authorized to speak publicly on the matter. The swaps had maturities of three, six and 12 months, they said. The RBI didn’t immediately respond to an emailed request for comment.
The central bank was attempting to reduce the pain of a recent tightening of rupee liquidity in India, which has been fueled by a rush for the local currency as corporations settle their tax bills and investors borrow cash to buy shares.
But the RBI’s recent sales of the currency complicate its efforts to support the rupee, which is under pressure from a surging dollar. The rupee has lost more than 1% of its value against the greenback so far this year, turning it from one of Asia’s best-performing currencies last year into one of the region’s biggest losers in 2025.
The rupee traded well past 86 per dollar on Monday, setting a new record low.
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