how does rupee strengthen when the Reserve Bank of India
sells dollars in the market????
please i need an answer
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Answer Posted / raj aryan
when RBI sells dollars in the market, it receives rupee in
return. This transaction has two effects in international
mkt
1. quantity of rupee decreases (demand increases)
2. quantity of dollar increases (supply increases)
by demand-supply theory, rupee strengthens and dollar
weakens.
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