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    HomeNewsOpinionLiquidity and RBI: A face-off!

    Liquidity and RBI: A face-off!

    The drop in liquidity is also contributed by RBI’s heavy interventions in the foreign exchange market, as when it sells dollars in the currency market in order to prevent excessive volatility in the exchange rate, the central bank passively pulls out the rupee liquidity from the system, creating a liquidity shortage. 

    Amit Pabari
    September 22, 2022 / 10:18 IST
    Reserve Bank of India.
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