Mumbai, May 21 -- The Reserve Bank of India's (RBI) upcoming USD 5 billion USD/INR buy-sell swap auction, slated for May 26, is expected to have a highly material impact on currency volatility by targeting market panic and anchoring trader expectations ahead of its execution date.

Speaking to ANI, Debopam Chaudhuri, Chief Economist at Piramal Finance Limited, emphasized that the central bank's impending operational window is a proven tactical tool designed to smooth out aggressive exchange rate fluctuations, noting that the psychological relief of the operation is already successfully functioning as intended.

"Whenever the USD/INR seems to go out of control in terms of its volatility--and the RBI always acts for volatility, not a specif...