The Reserve Bank of India's $5 billion dollar/rupee buy-sell swap auction on Friday is likely to see strong demand from lenders and corporate treasuries, six bankers said.

The Reserve Bank of India (NSE:BOI) (RBI) has announced measures to increase liquidity in the banking system. These actions include open market bond purchases and a buy-sell swap forex auction.

The Reserve Bank of India on Monday said it will purchase government securities worth Rs 60,000 crore in three tranches and announced several other steps to inject liquidity into the banking system.As part of measures to manage liquidity conditions,

India's central bank announced on Monday a host of measures to inject liquidity into the banking system, including bond purchases and dollar/rupee swaps, which analysts and traders said could be a precursor to a rate cut next month.