Abstract
The role of the Reserve Bank of India (RBI) in foreign exchange management has changed since independence. From strict control of foreign exchange resources before the balance of payments crisis of 1991, it moved to a more liberalized exchange rate management system, with a focus on current and capital account convertibility. It operates in spots, forwards and futures markets, both onshore and offshore, generally through agency banks. The intervention becomes critical during turbulent periods, from the global financial crisis to the Russia–Ukraine conflict. This article outlines recent market trends and enumerates a series of initiatives taken by the RBI since the early 1990s for the development of the foreign exchange market. The article concludes with a discussion on some recent measures for the internationalization of the rupee.
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