The floating of the Indian rupee has seen
a notable increase in the size and scale of intervention,
with a marked increase in the purchases of dollars by the
Reserve Bank of India (RBI). The switch to a floating
exchange rate has been accompanied by an increase in
volatility in most countries. But unlike the international
experience, the volatility in India was not so marked. This
once again points to the RBIs intervention to manage
volatility. So it has been seen that the RBI reacts to
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