At the empirical level, the flexibility of Indian exchange rate policy is captured by marked two-way movement of Indian rupee against the major currencies including US dollar. Recent international research on viable exchange rate strategies in emerging markets has lent considerable support to the exchange rate policy followed by India.
By now, the understanding of our strategy has greatly improved, and the recent evaluation and clarification of the strategy has certainly helped to this end. The ECB today ranks as one of the most open, transparent and predictable central banks in the world, and we continually seek to improve our communication.