.......In years past, RBI,
Mumbai (then, Bombay), used to buy spot pound sterling and forward up
to 12th month. RBI also used to sell pound sterling that was then
India’s intervention currency. These rates used to be quoted through the
Reuters Monitor screen and the RBI was bound by these rates to any
authorised dealer who approached the RBI with genuine merchant
transactions. As a sequel to such quotations, the Indian foreign
exchange market used to invariably settle down and trade in the band
between RBI’s buying and selling rates. Somehow, a few years after the
pound was displaced by the dollar as India’s intervention currency, this
practice was discontinued. In my view, it is worth a try again with the
dollar.............
Read - ET
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