The Reserve Bank of India's $5 billion dollar-rupee swap idea. ~Preet. As part of its liquidity management programme, the Reserve Bank of India (RBI) recently held a USD 5 billion dollar-rupee swap auction. This action will result in the injection of dollars and the evaporation of the rupee from the financial system. This will relieve inflationary pressures and boost the rupee. It is a forex technique in which the central bank purchases another currency with its own currency or vice versa. Swap of Dollars and Rupees: The central bank purchases dollars (US dollars or USD) from banks in exchange for Indian rupees (INR) and then immediately enters into a counter-deal with banks pledging to sell dollars at a later date. When the central bank sells dollars, it pulls out an equivalent amount of rupees, diminishing rupee liquidity in the economy. Because the transaction conditions are predetermined, there are no exchange rate or other market risks with these swap transactions. The RBI so