New Delhi, May 20 -- The Reserve Bank will conduct a $5 billion USD-INR buy and sell swap auction next week to inject long-term liquidity in the banking system.

The auction, to be held on May 26, also comes at a time when the rupee has significantly depreciated against the American currency amid persisting global uncertainties.

"On a review of current and evolving liquidity conditions, it has been decided to conduct a USD/INR Buy/Sell swap auction of $5 billion for a tenor of three years," the central bank said in a circular.

The swap is in the nature of a simple buy/sell foreign exchange swap from the Reserve Bank side.

A bank will sell US dollars to the Reserve Bank and simultaneously agree to buy the same amount of US dollars at th...