The Reserve Bank of India (RBI) on Monday said it will inject long-term liquidity worth US$ 5 billion into the banking system through a dollar-rupee buy-sell swap for a tenure of three years on April 23, the second such auction within a month.
The swap will be in the nature of a simple buy/sell foreign exchange swap from the Reserve Bank side. Under the swap, a bank would sell US dollars to the RBI and simultaneously agree to buy the same amount of US dollars at the end of the swap period.
Analysts at ICICI Direct say, "We expect the US$/INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions."
The brokerage recommends buying US$/INR in the range of 69.38-69.44.
On the global front, Asia shares extended their rally on Tuesday as factory activity surveys from China and the United States boosted investor confidence, triggering the largest one-day sell-off in the US Treasury market in nearly three months, Reuters reported.
Oil prices hovered near their four-month peaks after two key benchmarks booked their largest first-quarter gains in nearly a decade on positive signs for the global economy and tighter supplies.