GS-III: Economy, Environment, S&T
RBI forex operations
Not met yet — counts as met once you answer a question on it.
RBI intervenes in the foreign exchange market through spot and forward USD purchases/sales, use of the Net Forward Assets/Liabilities position, currency swap auctions, and sterilisation of rupee liquidity through Market Stabilisation Scheme (MSS) bonds — managing undue rupee volatility without targeting a specific exchange rate level. Central to this is the trilemma trade-off: balancing exchange rate stability, monetary policy autonomy, and capital account openness, and how large interventions affect domestic liquidity and bond yields.