| Directions: Q. 1 to 5 |
| Read the following case study and answer the questions. |
| Indian's exchange rate policy has evolved in line with international and domestic developments. Post-independence, in view of the prevailing Bretton Woods system, the Indian rupee was pegged to the Pound sterling. With the breakdown of the Bretton Woods system, and also the declining share of UK in India's trade, the rupee was delinked from the Pound sterling in September, 1975. During the period between 1975 to 1992, the exchange rate was officially determined by the RBI within nominal band of plus or minus 5 percent of the weighted basket of currencies of India's major trading partners. This exchange rate was referred to as 'adjustable nominal peg with a band'.. |
A) fixed exchange rate system
B) flexible exchange rate system
C) manage floating system
D) None of the above
Correct Answer: A
Solution :
Fixed exchange rate system is the one in which, price of foreign exchange or currency is fixed by the government authority, RBI in India.
You need to login to perform this action.
You will be redirected in
3 sec
