Under this newly launched liquidity infusion mechanism, banks sell dollars to the RBI and get rupee funds from it with the guarantee that the central bank will return the dollars after three years. So in effect, banks get rupee funds at a time when they are short on liquidity while the dollars that the RBI buys from the banks add up to the country’s foreign exchange (forex) reserves, thus boosting the rupee’s strength against the greenback.from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News http://bit.ly/2GzgGd5
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