Q1. In a USD/INR Buy-Sell Swap conducted by the RBI, which of the following happens at the initiation of the swap?
A RBI sells dollars to banks and receives rupees
B RBI buys dollars from banks and provides rupees Correct
C RBI raises SLR to absorb liquidity
D RBI sells government bonds to reduce money supply
Explanation
In a Buy-Sell Swap, the RBI buys US dollars from banks now (providing rupees in return), injecting rupee liquidity. At swap maturity, the transaction reverses: RBI sells the dollars back to banks and receives rupees.