Under a generalised floating regime it is difficult for a country to stabilise its rates entirely against all major currencies simultaneously. What can be attempted is to moderate the average variations in its exchange rates and thereby reduce the impact of exchange rate variations originating from oxogenous factors on its trade and payments. Though theoretically there are many alternative exchange rate arrangements to choose from, in practice the choice of an appropriate exchange rate for the rupee narrows to a peg to a selected multi-currency basket or a peg to economic indicators or a combination of both. However, the basket link has the potential danger of diverting our attention from the need for constant review and revision of the rates to ensure that the level of the exchange rate is consistent with the objective needs of the economy. With the basket link if we use the dollar as the basis for the valuation of the basket and the intervention currency, not only can the frequency of adjustment of exchange rate of rupee against the intervention currency be minimised but greater stability can be imparted in the daily and short-run rates in the rupee-dollar rate which will benefit the bulk of India's trade and other payments which are invoiced in the dollar.
The Economic and Political Weekly, published from Mumbai, is an Indian institution which enjoys a global reputation for excellence in independent scholarship and critical inquiry. First published in 1949 as the Economic Weekly and since 1966 as the Economic and Political Weekly, EPW, as the journal is popularly known, occupies a special place in the intellectual history of independent India. For more than five decades EPW has remained a unique forum that week after week has brought together academics, researchers, policy makers, independent thinkers, members of non-governmental organisations and political activists for debates straddling economics, politics, sociology, culture, the environment and numerous other disciplines.
First published in 1949 as the Economic Weekly and since 1966 as the Economic and Political Weekly, EPW, as the journal is popularly known, occupies a special place in the intellectual history of independent India. For more than five decades EPW has remained a unique forum that week after week has brought together academics, researchers, policy makers, independent thinkers, members of non-governmental organisations and political activists for debates straddling economics, politics, sociology, culture, the environment and numerous other disciplines.
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