The Reserve Bank of India today clarified that oil marketing companies swap window will continue and will be closed gradually.
After reports by a television channel that the Government is considering closing the dollar swap window offered to oil companies, the central bank came out with a statement today.
“The OMC swap window remains operational. Any tapering of the window, as and when it occurs, will be done in a calibrated manner, the RBI said in a statement.
This led to sharp depreciation in the Indian rupee which fell to 61.71 against the dollar after it appreciated to 60.92 in the morning session of trading. This was the highest level since August 8.
After the RBI’s statement, the rupee recovered to 61.30 levels against the American currency.
Over $5 billion have come in through the swap facility.
Soon after taking over as the RBI Governor on September 4, Raghuram Rajan announced the opening of a swap window facility to encourage banks to get funds from NRIs.
Under the facility, banks are permitted to swap fresh FCNR (B) dollar funds, mobilised for a minimum tenor of three years, at a fixed rate of 3.50 per cent per annum for the tenor of the deposit.