When large foreign inflows push the rupee up too fast, the RBI may

sell dollars from reservesCorrect answerYour answerban exportsCorrect answerYour answerfix the rate by lawCorrect answerYour answerbuy dollars in the market and add them to reservesCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

Buying dollars raises demand for them, which slows the rupee's rise.

Concept: Intervention against appreciation
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsManaged floating

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Ten questions from Foreign Exchange Rate, at your own pace.

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Ten questions from Foreign Exchange Rate, at your own pace.

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When large foreign inflows push the rupee up too fast, the RBI may

Explanation