RBI purchases USD 1 billion to prevent rupee from rising
Q. RBI purchased how much currency in USD to prevent rupee from strengthening too much?- Published on 01 Apr 16a. 100 million
b. 5 billion
c. 50 billion
d. None of these
ANSWER: 100 million
RBI bought as much as USD 1 billion (100 million) to prevent rupee from strengthening too much after the currency hit three-month highs as investors poured funds into emerging markets, and despite the buying, the rupee struck a three month high of 66.1700 per dollar on 31st March and was on course to post a gain of 3.2 percent in March - its biggest monthly gain in 2 1/2 years.
- The rupee's appreciation reflects a broad move into high yield emerging markets by investors, as central banks for major economies - notably the Bank of Japan and European Central Bank - have adopted a more dovish stance.
- Traders said they expect the rupee could appreciate further, after foreign investments into Indian debt and equity surged to a one-year high of USD 3.3 billion in March, reversing outflows from earlier this year.
