Mumbai: The Reserve Bank of India ( RBI ) on Wednesday bought government bonds worth Rs 50,000 crore from the market in order to infuse more liquidity in the banking system to spur growth in the economy .

The purchase is part of the RBI's monetary policy announcement last week to inject Rs 1 lakh crore in the market via the purchase of government securities and another $5 billion equivalent via a foreign exchange swap facility.

Also Read: ‘Unsubstantiated rumours’: RBI dismisses reports of selling 35 tonnes of gold

The RBI has been selling US dollars in the market to prevent the rupee from going into a free fall, which has resulted in a lot of cash being sucked out of the banking system, which also tends to lead to an increase in interest rates in the market.

Reserve Bank Governo

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