Within these overall boundaries, the exchange rate is determined by daily variations in demand and supply. In the recent episode of depreciation, as I indicated earlier, a sharp fall in capital inflows led to a drying up of supply, while demand on account of the current account deficit continued unabated, leading to the outcome we saw.
This letter, which is available on the department web site, expresses concern that the bank anti-tying statute itself may suppress competition and harm consumers, especially as it is applied to large customers. The department has recommended that the Board interpret the bank antitying statute in a manner similar to the federal antitrust laws.