- Subject index
India's Financial Sector deals with the reform measures undertaken in the financial sector and their impact. The impact is assessed in terms of growth in activities, profitability, financial stability, and financial inclusion among intermediaries such as banks, NBFCs and mutual funds, as well as in the financial markets. This book adds to the existing literature on the subject by offering an analysis of the impact that embraces not only the increased activities in the sector but also the issue of financial stability and financial inclusion.
The discussion is divided in three parts. The first part deals with financial intermediaries, the second explores the primary and secondary markets, and the third focuses on the internationalization of the Indian financial market. Further topicality is provided to the discourse ...
Chapter 8: The Foreign Exchange Market
The Foreign Exchange Market
Any discussion of reforms in the Indian financial market cannot be complete without a reference to the foreign exchange market insofar as the activities in the two markets are quite interdependent. The present chapter, therefore, makes a survey of the reform measures and analyses their possible impact, more particularly in terms of growing turnover and the generation of stability in the foreign exchange market.
The Process of Reform
The adoption of floating exchange rate system in 1993 and the resultant exchange rate risk needed a variety of hedging activities. Again, after convertibility on merchandise trade transactions since March 1993 followed by full current account convertibility by August 1994, the government appointed the Expert Group on Foreign Exchange Markets in India, ...