Exchange rate policy, Microeconomics

Assignment Help:

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.  


Related Discussions:- Exchange rate policy

Determinants of private demand - ability to pay, Determinants of Private De...

Determinants of Private Demand - Ability to Pay In a developing country like India, of all the factors determining investments in education, the most important factor is the ‘

Theory of production, when total production fall what,s the status of avera...

when total production fall what,s the status of average product and marginal product

How does a firm maximize their total revenue, The definition of a price mak...

The definition of a price maker is states as “firm with some power to set the price bcoz the demand curve for its output slopes downward”, that in effect, mean those firms with a d

Law for diminishing marginal returns, The Law for Diminishing Marginal Retu...

The Law for Diminishing Marginal Returns - As use of an input increases in equal increments, a point will be approched at which the resulting additions to output decreases

Elasticity, 1. What are the uses of elasticity to the public sector and pri...

1. What are the uses of elasticity to the public sector and private sector? (20 marks)

Marginal utility theory, discuss whether marginal utility is a realistic pi...

discuss whether marginal utility is a realistic piece of economy analysis in a consumer demand

Analysing the digital economy relative to e business, Problem: a) What ...

Problem: a) What factors would you consider when analysing the digital economy relative to e business? b) "The growing use of the internet by consumers and businesses has re

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd