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BANKING AND MONETARY POLICY — Economics STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsBANKING AND MONETARY POLICY1 Mark
Question
What is the Sterilization policy of $RBI?$
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Answer

When there is excessive inflow of foreign exchange in India owning to trade and foreign investment, the $RBI$ indulges in open market and sale of government securities equal to the amount of inflow of foreign exchange.

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