The special swap window for foreign currency deposits and banks’ overseas borrowings was able to attract $34 billion in about three months, said the Reserve Bank of India (RBI) on Monday. The last day to avail the facility was November 30. The RBI said that any new funds raised by banks will flow directly into the market instead of the RBI’s foreign exchange (forex) reserves.
The forex market would also need to absorb the entire dollar demand from oil marketing companies (OMCs) which was earlier met by the RBI. For their part, OMCs need to smoothen their daily dollar demand, and can also tap credit lines from banks, the RBI said. It also said it “will continue to keep all options open regarding settlement of OMC swaps, including rupee settlement”.