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Fed gives RBI what it wants: dollar swap facility

NEW DELHI : The US Federal Reserve on Tuesday gave the Reserve Bank of India (RBI), as well as all other central banks, currency swap facility to help them fund their dollar requirements. The facility was so far extended to select central banks that did not include the RBI or the People’s Bank of China.

The Fed’s move is a very positive and accommodative step and will help stabilize markets, reduce volatility, and ease pressure on currencies such as the rupee, said analysts

RBI had recently, albeit informally, requested the Fed to be given this facility, said a person aware of the development. The facility, effective 6 April, will be in place for at least six months, the Fed said.

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