Box IV REFORMS IN THE FOREIGN EXCHANGE MARKET Exchange Rate Regime • Evolution of exchange rate regime from a single-currency fixed-exchange rate system to fixing the value of rupee against a basket of currencies and further to market-determined floating exchange rate regime.
In other words, it is clear that developments in financial markets have contributed to a more efficient allocation of capital. This is also to the benefit of pension funds. On the other hand, the integration of the financial markets and the technological developments have substantially increased the risk of contagion in the event of a financial crisis.