RBI may continue buying dollars despite US monitoring
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India has amassed $100 billion since the lockdown and used it to buy US treasury bills. RBI is also among the top 10 buyers of US treasury bills.
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Kolkata/Mumbai: The central bank is likely to continue with its interventions in the foreign exchange market even after the US Treasury Department put India on its ‘currency manipulator’ watch list, industry experts told ET.
The Reserve Bank of India (RBI) may keep buying dollars to prevent the rupee from losing export competitiveness. Sterilising the
dollar inflow and simultaneously sucking out the resulting rupee liquidity assumes importance as an inflation-targeting central bank seeks to lower the consumer price index (CPI) to levels within the mandated 4-6% band.