Indian Rupee Forward Premiums Retreat Amid RBI's FX Swap Announcement
AI Summary1 min read
TL;DR
Indian rupee forward premiums declined after the RBI announced a $10 billion USD/INR buy-sell swap to reduce excess dollar liquidity and ease premium pressures. For example, the January month-end premium dropped to 41 paisa from 58 paisa.
The Indian rupee forwards retreated after the Reserve Bank of India unveiled a $10 billion USD/INR buy-sell swap, expected to siphon off excess dollar liquidity and cool a sharp run-up in premia. The USD/INR January month-end forward premium eased to 41 paisa, down from a peak of 58 paisa hit on Tuesday. Similarly, the November month-end premium retreated to 240 paisa, pulling back from a peak of 278 paisa.
