India's central bank is draining excess cash from banks using currency swaps. This action follows record high funds in the financial system. The Reserve Bank of India sells dollars for rupees, reducing rupee liquidity. Massive inflows had previously pushed surplus funds to 11 trillion rupees. These measures aim to manage inflation risks posed by cheaper borrowing.

The Reserve Bank of India absorbed more than ₹6 trillion through liquidity withdrawal operations after banking system surplus hit a record ₹11.6 trillion. Banks parked ₹2.59…

RBI conducts September USD/INR sell-buy swaps as forward premiums rise, signaling changes in rupee liquidity management.