In this respect, the interest rate increase has not, for instance, eliminated the need in the upcoming wage bargaining rounds to ensure that wage settlements do not give rise to second round effects. It should instead have given additional assurance to wage negotiators to keep wage increases in line with price stability.
We have come a long way from the days of ‘RBI’s middle rate’. Today, the Indian forex market is pretty well developed in terms of daily turnover as well as the range of products available. Yet, it continues to be a regulated market and let us now turn to the motivation for and the future of the regulatory regime. 20.