RBI to provide forex liquidy to for swapping

Mumbai, Nov 7 (UNI) In continuation of its measures to help Indian banks to tideover the present global financial crisis, the Reserve Bank of India today announced provisioning of forex liquidity to Indian public and private banks having foreign branches or subsidiaries through forex swaps of tenors upto three months.

The measure announced in the context of the global developments aimed to provide flexibility to Indian banks in managing their short-term funding requirements at their overseas offices, RBI said in a statement here.

This facility will be available on request until further notice, the Apex Bank said adding that the pricing of swaps will be based on the interest rates in the domestic as well as the overseas markets using the Reserve Bank reference rate for the USD-Indian rupee exchange rate.

Further, for funding the swaps, banks could also borrow under the Liquidity Adjustment Facility (LAF) for the corresponding tenor at the prevailing repo rate. The Reserve Bank of India would be prepared to consider any specific relaxation of Statutory Liquidity Ratio (SLR) requirements for this purpose, the statement said.

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