MUMBAI: The Reserve Bank of India’s 3-year dollar/Indian rupee buy-sell swap witnessed robust appetite on Tuesday, with the auction drawing bids a little over twice the $5 billion size. The swap is part of a $16 billion liquidity injection into the banking system, aimed at boosting transmission of rate cuts to lending rates. The RBI, under chief Sanjay Malhotra, has aggressively added liquidity to the banking system. The RBI cut rates by 25 basis points earlier this month, and has cut them by a total of 125 basis points this year. The central bank accepted 118 bids at the FX swap auction with the premium cut-off set at 7.65 rupees. A total of 222 bids worth $10.35 billion were received. RBI’s $5 billion FX swap to sail through, high hedging costs cloud corporate appetite Bankers had anticipated robust demand owing to the excess dollar liquidity in the banking system. The settlement of the initial leg of the FX swap will take place on Thursday, through which the RBI will inject rupee liquidity into the banking system. The transaction will be reversed three years later.