The Reserve Bank of India (RBI) has announced a range of measures designed to boost the country's currency, the rupee.
It was announced that it will auction 220 billion rupees (£2.3 billion) of government cash management bills every Monday.
However, the RBI would not say how long the scheme is expected to run for. Action was needed to support the rupee after it slipped to a record low of 61.80 against the US dollar on Tuesday (August 6th).
The "measures are an effort to siphon off excess liquidity from the system and will help the rupee," said Shubhada Rao, chief economist with private Yes Bank, who added: "But liquidity tightening measures are not enough. Growth will have to become a priority."
Since the start of the year, the rupee has lost around 12 per cent of its value, so the RBI will be hoping that this step will help to reverse the trend and boost the struggling currency.
Royal Dutch Shell recently blamed adverse currency rates as one of the reasons why the company recorded a fall in its latest profits.
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