After the balance of payment crisis of 1991 a two-step downward adjustment in the exchange rate was undertaken in July 1991 and then followed by a transitional 11-month period of dual exchange rates before a market-determined exchange rate system was set in place in March, 1993. Since then, the exchange rate is largely determined by demand and supply conditions in the market.
The exchange rate policy in recent years has been guided by the broad principles of careful monitoring and management of exchange rates with flexibility, without a fixed target or a pre-announced target or a band, while allowing the underlying demand and supply conditions to determine the exchange rate movements over a period in an orderly way.