Finally, a strong liberalization of FDI regulations, coupled with the government’s active efforts to attract foreign investors, have resulted in record FDI inflows last financial year. We also are careful in moderating periods of extreme volatility in the currency through exchange intervention. This is more of an art than a science, and we are extremely careful not to try and target any particular rate.
Instead, we let the market adjust as needed, intervening only when we are convinced the movement is excessive. As a result, despite running a current account deficit, the currency has been relatively stable even in extreme risk-off periods.