The Reserve Bank of India, is the custodian of the country's foreign exchange reserves and is vested with the responsibility of managing their investment.
Does RBI intervene in the forex market?
- II RBI Intervention in the Forex Market: Exposition of a Censored Tobit Model Based on Daily Intervention The pattern and consequences of RBI intervention in the forex market as docu-
What is the role of Reserve Bank of India in forex?
- In substantive terms, the Reserve Bank functions as the custodian and manager offorex reserves, and operates within the overall policy framework agreed upon with Government of India. Why Hold Forex Reserves? Technically, it is possible to consider three motivesi.e.,transaction, speculative and precautionary motives for holding reserves.
Can RBI target exchange rate based on Reer-Neu-Tral?
- relating to its intervention in the forex market". RBI has since deemed it unfeasible to target exchange rate based on REER-neu- tral. The RBI still does not make available the neutral REER value, nor does it make it available on a weekly basis. The REER statistics is made available only with a clear lag of two months. In a similar vein,
Why did RBI sell dollars to select banks only?
- As an example, RBI reportedly sold dollars only to select banks, excluding foreign banks. The intention was purportedly to prevent the latter from profiting from the arbitrage opportunities between the RBI
In India, legal provisions governing management of forex reserves are set out in the RBI Act and Foreign Exchange Management Act, 1999 and they also govern the open market operations for ensuring orderly conditions in the forex markets, the exercise of powers as a monetary authority and the custodian in regard to ...