Exchange Rate System in India and its Types – Indian Economy for Prelims 2018



You can join my Live classes on Economy here: https://goo.gl/urfp1H In this lesson, Ayussh explains the exchange rate system and its types. This is an important …

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Exchange Rate System in India and its Types - Indian Economy for Prelims 2018

You can join my Live classes on Economy here: https://goo.gl/urfp1H

In this lesson, Ayussh explains the exchange rate system and its types. This is an important concept to understand under Indian Economy for UPSC 2018 preparation.
An exchange rate regime is the way an authority manages its currency in relation to other currencies and the foreign exchange market. Between the two limits of fixed and freely floating exchange regimes, there can be several other types of regimes. In their operational objective, it is closely related to the monetary policy of the country with both depending on common factors of influence and impact.

The exchange system in India has a big impact on world trade and financial flows. The volume of such transactions and the speed at which they are growing makes the exchange rate regime a central piece of Indian Economy.

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