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Flash: RBI announced FX swaps with public sector oil companies – Nomura

FXstreet.com (Barcelona) – The RBI announced FX swaps directly with public sector oil marketing companies (OMCs) to provide them with short-term USD liquidity, FX Strategists at Nomura note.

Key Quotes

“This measure should reduce spot USD demand given that net oil imports (USD9bn, based on latest 12m average) constitute about half of the overall trade deficit (USD16.5bn, based on latest 12m average). Although the details of exact mechanism are not yet known, consensus expect the swaps to be about six months in tenor, as this would adequately prolong the actual USD buying from OMCs until that time.”

“This measure is only likely …read more