RBI’s response as forex manager The RBI assured the markets that it would continue to sell foreign exchange (US dollar) through agent banks to augment supply in the domestic foreign exchange market or intervene directly to meet any demand-supply gaps, and did so, especially in October 2008.
It also provided forex swap facility with a three month tenor, to Indian public and private sector banks having overseas branches or subsidiaries – this acted as a strong comfort to such banks in the context of the drying up of the overseas money markets.