Exchange rate policy, Microeconomics

Exchange Rate Policy:

LERMS, a dual exchange rate system, was introduced in the Budget for 1992-93. Under this system, 40 per cent of foreign exchange earnings were to be surrendered at the official exchange rate. Remaining 60 per cent were converted at a market-determined rate.  

- Budget for 1993-94 introduced UERS which makes rupee convertible at unified market determined rate of exchange. All payments and receipts of foreign exchange to be converted in rupees at market-determined rate of exchange.

- Budget for 1994-95 introduced full convertibility on current account that makes many trade transactions relatively more free of controls.

- Import restrictions on capital goods, raw materials and components virtually eliminated. Thus, excess import demand will be reflected in a higher market exchange rate and self-correcting mechanism will operate to keep trade deficit in check.  

Posted Date: 11/15/2012 12:28:38 AM | Location : United States







Related Discussions:- Exchange rate policy, Assignment Help, Ask Question on Exchange rate policy, Get Answer, Expert's Help, Exchange rate policy Discussions

Write discussion on Exchange rate policy
Your posts are moderated
Related Questions
Once the organization has decided to move forward with the development of a new or modified system, it is time to determine what tasks are necessary to move the project from initia

Five identical people live in a small town and can earn a living either by having cattle $100 or by becoming a singer. If one person competes their expected payment is 210, if two

A monopolist''s demand curve is P=100-2q. find his MR function. at what price is MR zero

Returns to Scale in Carpet Industry *  The carpet industry has grown from the small industry to large industry with some large firms. *  Question - Can the growth be illu

What actions could a government take in order to keep the price above market equilibrium? There are four basic possibilities here; 1) Minimum price;  2) A tax on the good

explain the relationship between scarcity,choice and opportunity cost

explain normal profits

Mathematical Derivation of ordinary demand function: Here we present the mathematical and more general proof of the above result. Consider, again, the initial price income sit

a) An enhances in the quantity demanded of a good can happen because consumers expect the price of that good to enhance in the near future. b) A price ceiling imposed above the

What was the price index for 2008, 2009 and 2010?