Wednesday, July 17, 2013

Why RBI is only adding to rupee volatility, not curbing it

.........Rejecting bids for funds in the LAF will make borrowers go to the market for funds leading to overnight money market rates trending higher on the back of higher demand for funds. However, the RBI has chosen to take a more complicated route to prevent the rupee volatility and this will most likely backfire on the central bank.

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