Prepared for the taper

......For India, fortunately, the swap agreement that RBI put in place ensured $34 billion more came into the economy and, more importantly, in recent months RBI found a way to remove a very significant part of the demand for dollars—$164 billion in a full year—from oil importing PSUs from the daily market for foreign exchange. While RBI managed to slow down the depreciation of the rupee by selling dollars directly to oil PSUs and then entering into swap agreements—this ensured forex reserves didn’t fall—with them for a date in the future, the markets always felt this would worsen matters when .......

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