Under these deals, the RBI sells dollars in exchange for rupees and commits to repurchasing the dollars later. This temporarily pulls rupees out of circulation. Bankers put the value of swaps across September and October dates at roughly $700 million; the report does not state an officially confirmed total.

The operations come amid a large cash surplus at banks, estimated at ₹14 trillion–₹15 trillion. The report links much of this to deposits from non-resident Indians, through which lenders have raised close to $128 billion. Converting those overseas funds into rupees has added to available banking-system cash.

Traders and treasury officials said the shift followed limited success with another liquidity-management tool. A 30-day variable rate reverse repo auction earlier in the week attracted little interest from banks. Meanwhile, the swaps lifted demand for dollars for future delivery, taking the September forward premium to 10.75 paise. Premiums for other tenors also increased.

The transactions can also help reduce the RBI's net forward dollar obligations, which stood near $137 billion at July-end. IDFC FIRST Bank's Gaura Sen Gupta suggested that around ₹7 trillion may need to be absorbed through a combination of reverse repo auctions and currency swaps.