The Reserve Bank of India used dollar-rupee sell-buy swaps for a second straight day on September 10, traders told Reuters. The operations were aimed at absorbing surplus rupee liquidity and were concentrated mainly in shorter maturities, while one-year forward premiums rose sharply over two sessions.
The mechanism is different from simply selling dollars in the spot market. A sell-buy swap removes rupee liquidity now while committing to reverse the transaction later. Higher forward premiums also change hedging economics: betting against the rupee becomes more expensive, importers face a higher cost for forward dollar cover, and exporters get a stronger incentive to sell dollars forward.
That does not remove the underlying pressure. Oil prices above $100 and persistent importer demand for dollars continue to matter for India's external account and inflation outlook. Reuters cited traders estimating roughly $600-700 million of swaps on Thursday after around $1 billion the previous day, but the central point is the policy channel, not the exact dealer estimate.