As part of its over Rs 1.5 lakh crore liquidity injection into the banking system, the Reserve Bank on Tuesday said the Reserve Bank will be conducting a USD/INR Buy/Sell swap auction of USD 5 billion on January 31 for a tenor of 6 months. RBI stated in its details that the market participants would be required to place their bids in terms of the premium that they are willing to pay to the Reserve Bank for the tenor of the swap, expressed in paisa terms up to two decimal places. The auction cut-off would be based on the premium. The auction will be a multiple-price based auction, i.e., successful bids will get accepted at their respective quoted premium, the central bank noted. The decision on liquidity injections comes days ahead of RBI's next bi-monthly monetary policy.
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