41st B.P.S.C. (Pre) 1996
The exchange rate of Indian rupee is determined by-
aIn relation to the United States (US) dollar
bIn relation to the British pound
cIn respect of some selected currencies
dNone of the above✓ Correct
Explanation
From 1975 to 1992, the exchange rate of the Indian rupee used to be determined on the basis of a basket of currencies of developed countries. This foreign-currency basket included the currencies of five countries/groups—United States dollar, Japan’s yen, the United Kingdom’s pound sterling, China’s Renminbi (Yuan), and the euro. From March 1992 to March 1993, a dual system of a market rate and an administered (official) rate was adopted, and from March 1993 onward, the exchange rate of the rupee has been determined on the basis of demand and supply in the market.
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