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Question : 2
Total: 49
"Considering the depreciation of Indian Currency (₹) in the international market, the Reserve Bank of India (RBI) has decided to purchase Indian currency (₹) in the open market."
This represents ______ exchange rate system.
(Fill up the blank with correct alternative)
This represents ______ exchange rate system.
(Fill up the blank with correct alternative)
Solution:
(c) managed floating
Explanation: When RBI occasionally intervenes in the open market by purchasing and selling of Indian currency to influence the Foreign exchange rate, it is known as managed floating. The primary goal of a managed floating exchange rate system is to balance the benefits of exchange rate flexibility with the need for stability in the exchange rate.
Explanation: When RBI occasionally intervenes in the open market by purchasing and selling of Indian currency to influence the Foreign exchange rate, it is known as managed floating. The primary goal of a managed floating exchange rate system is to balance the benefits of exchange rate flexibility with the need for stability in the exchange rate.
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