Reserve Bank of India sets USD 5 billion three-year swap auction
AD Category-I banks must price swap bids before RBI’s May 26 auction
Change
Reserve Bank of India announced a USD 5 billion USD/INR Buy/Sell swap auction for AD Category-I banks on May 26, 2026, with a three-year tenor ending May 29, 2029.
Why it matters
The auction creates a one-hour bidding window for eligible banks to sell US dollars to RBI and receive rupee liquidity through a three-year swap. Bids must be quoted as swap premium in paisa up to two decimal places, with successful bids accepted at their quoted premium.
Implications
- — AD Category-I banks must finalise participation and bid pricing before the May 26 auction window because RBI will accept bids based on quoted swap premium.
- — Treasury operations teams at successful bidder banks must prepare spot and far-leg settlement flows because the swap cannot be cancelled, modified or revised once undertaken.
Who is affected
- — AD Category-I banks in India
- — FX trading desks at eligible banks
- — Treasury operations teams handling RBI swap settlement
What to watch
- — Auction window: May 26, 2026, 10:30 AM to 11:30 AM
- — Near leg: May 29, 2026; far leg: May 29, 2029