Recent concerns over a potential market sell-off when the Reserve Bank‘s FX swap facilities, unveiled during the 2013 “taper tantrum”, mature have been overstated. For a start, the RBI has already confirmed that maturing swaps have been covered by purchases of currency forwards. What’s more, even if there is a temporary blip in the central bank’s FX reserves, the big picture is that India’s external position is far stronger now than it was three years ago.
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