..........To curb speculation on the dollar-rupee exchange rate, the RBI has undertaken a surgical strike. It has pushed up overnight interest rates—by clamping the cash it lends banks via its liquidity adjustment facility—in the domestic money market. Here, a quick buck could be made by borrowing rupees cheaply to buy dollars and rebuy rupees as the currency fell further. With a spike in overnight rates, this game gets harder to play..............
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