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when FDI comes in, RBI keeps the dollars and gives INR.I mean even chidambram said to print more money
as per RBI money supply in 2014 was 72 lakh crore ₹, now it is 140 lakh crore ₹. which means RBI have been printing money, other wise inflation wouldn’t have stayed between 4-6% target. inflation rises not only based on supply demand calculations, but money supply availability as well.