RBI introduces Dollar- Rupee swap facility
RBI has introduced a dollar-rupee swap facility.
Objective: To increase the flow of credit to the export sector to support incremental Pre-shipment export Credit in Foreign Currency (PCFC) by banks.
As per RBI, banks will have the option to avail rupee refinance to the extent of the swap with RBI under a special export credit refinance facility. The facility will be available to banks from January 21 till June 28, 2013, for a fixed tenor of three or six months.
The total limit for the banking system works out to $6.5 billion. Banks will be able to buy US dollars up to its eligible swap limit from RBI and at the same time sell the same amount of dollars forward as per the term of the swap, at the prevailing market rates for swaps of similar tenor. At the end of the swap term, the banks will exchange the dollars against the rupees with RBI.
RBI will decide upon the number of banks that can access the facility, the maximum amount of swap that RBI would contract with banks and the maximum limit each bank can do on a particular day after taking into account market conditions.