Advertisements
Advertisements
Question
How does RBI intervenes to influence the exchange rate?
Short Answer
Advertisements
Solution
The Reserve Bank of India (RBI) intervenes in the foreign exchange market to stabilize the rupee's value and control volatility. It does this by:
- Selling foreign currency, such as US dollars, to strengthen the rupee when it depreciates too much.
- To avoid excessive appreciation, purchase foreign money when the rupee gains too much strength.
shaalaa.com
Is there an error in this question or solution?
