Explained: Has India's exchange rate regime changed for the worse?

Ever since the liberalisation in 1991, the RBI has pursued a flexible exchange rate policy

Over the past few years, the Reserve Bank of India (RBI) has radically altered the nation’s exchange rate policy, shifting from a relatively flexible regime to an inflexible one. This change has been noted by a few commentators, including K P Krishnan and Sajjid Chinoy. But by and large it has not received the attention it merits.

  This is unfortunate, since the shift has had important implications for the nation’s competitiveness, its export performance, economic growth, and external resilience. Consider how.

  To understand the radical nature of the current regime, we first need to grasp the policy that long preceded