RAS question
The RBI's $5 billion USD/INR Buy-Sell Swap in December 2025 had a tenor of:
Correct answer: (C) 3 years.
The RBI's USD 5 billion USD/INR buy-sell swap auction announced for 16 December 2025 had a tenor of thirty-six months, or three years.
Explanation
The RBI announced a USD/INR buy-sell swap auction of USD 5 billion for 16 December 2025 with a tenor of thirty-six months. That fixes the answer at three years, not at a short six-month or one-year liquidity operation. The swap was meant to inject rupee liquidity while supporting foreign-exchange stability. In this structure, the relevant exam detail is the tenor of the central bank's forex swap; thirty-six months is three years.
Why the other options are wrong
- (A) Six months is too short because the RBI announcement specified a thirty-six-month tenor.
- (B) One year does not match the announced tenor, which was thirty-six months rather than twelve months.
- (D) Five years overstates the period because the tenor was thirty-six months, i.e. three years.
Concept
This tests RBI monetary and foreign-exchange liquidity operations, especially how swap auctions are used and reported. It recurs in RAS because current economy questions often ask candidates to connect RBI instruments with liquidity and forex-stability objectives.