Mumbai, Feb 28 (PTI) The Reserve Bank on Friday conducted US dollar-rupee swap worth USD 10 billion for injecting long-term liquidity in the system, with the auction eliciting robust demand.

The settlement of auction will take place on March 4 and March 6.

The USD/INR Buy/Sell swap auction for a tenor of 3 years was oversubscribed 1.62 times.

The Reserve Bank of India (RBI) said it received 244 bids during the auction and 161 of them were accepted for amount totalling USD 10.06 billion.

The auction comes in the backdrop of rupee trading at 87.46 against the US dollar amid global uncertainties.

The swap was in the nature of a simple buy/sell foreign exchange swap from the Reserve Bank side.

A bank shall sell US dollars to the Reserve Bank and simultaneously agree to buy the same amount of US dollars at the end of the swap period.

While announcing the swap auction last week, the RBI had said: "In order to meet the durable liquidity needs of the system, the Reserve Bank has decided to inject Rupee liquidity for longer duration through long-term USD/INR Buy/Sell swap. Accordingly, the Reserve Bank will be conducting a USD/INR Buy/Sell swap auction of USD 10 billion for a tenor of 3 years." In January also, the RBI had announced liquidity injection worth over Rs 1.5 lakh crore through different instruments, including USD 5 billion forex swap.

The rupee declined 28 paise to 87.46 against the US dollar on Friday. PTI NKD HVA

Foreign exchange swap injects long-term rupee liquidity via multi-year buy/sell auction; robust demand caused oversubscription. The Reserve Bank conducted a foreign exchange buy/sell swap auction to inject durable rupee liquidity through a multi year USD/INR buy/sell swap; banks sold US dollars to the Reserve Bank and agreed to repurchase them at the end of the swap period, with settlements scheduled on specified future dates. The auction received robust demand, was oversubscribed, and a number of bids were accepted to effect the announced liquidity injection as part of the central bank's broader liquidity management measures.