The Reserve Bank of India (RBI) has announced plans to conduct a significant foreign exchange and bond market operation. On February 4, 2026, the RBI will hold a USD/INR buy/sell swap auction worth $10 billion with a tenor of 3 years. This operation aims to inject liquidity into the foreign exchange market and stabilize the Indian rupee.
In addition to the foreign exchange operation, the RBI will also conduct open market operation (OMO) purchase auctions of Government of India securities. The total amount of securities to be purchased is Rs 1,00,000 crore, which will be split into two tranches of Rs 50,000 crore each. The auctions will be held on February 5, 2026, and February 12, 2026.
The OMO purchase auctions are expected to help regulate the money supply in the economy and maintain liquidity in the bond market. By purchasing government securities, the RBI will inject liquidity into the system, which can help reduce borrowing costs and stimulate economic growth. The move is also expected to have a positive impact on the bond market, as it will help to reduce yields and increase demand for government securities.
The combination of the foreign exchange swap auction and OMO purchase auctions demonstrates the RBI’s efforts to manage the country’s foreign exchange reserves and regulate the money supply in the economy. The RBI’s actions are aimed at maintaining financial stability, promoting economic growth, and ensuring that the Indian economy remains resilient in the face of global economic uncertainties.
Overall, the RBI’s plans to conduct a USD/INR buy/sell swap auction and OMO purchase auctions are significant moves to manage the country’s foreign exchange and bond markets. The operations are expected to have a positive impact on the economy, and market participants will be closely watching the auctions to gauge the RBI’s intentions and adjust their strategies accordingly. The outcomes of these auctions will be crucial in determining the direction of the Indian economy in the coming months.