said. India’s reserve position with the IMF was down by $4 million at $4.195 billion in the reporting week, the apex bank data showed.
Meanwhile, a study published in the Reserve Bank’s latest Bulletin said foreign exchange interventions by the central bank effectively countered capital flows volatility — the main source of exchange rate volatility in India.
The study titled ‘Foreign Exchange Intervention: Efficacy and Trade-offs in the Indian Experience’, investigates the effectiveness of forex interventions undertaken by the Reserve Bank of India (RBI).
The study finds that the volatility of portfolio flows, induced by global spillovers, is the main source of exchange rate volatility in India.
“Foreign exchange interventions, both spot and forward, effectively counter capital flows volatility, with symmetric effects of purchases and sales," said the study by a team led by Michael Patra, who demitted the office of RBI Deputy Governor earlier this month. (Source: https://www.news18.com)