This not only reflects the substantial increase in global trade and financial interaction with the outside world but also the increasing awareness of the corporates to foreign exchange risk and use of derivatives in managing such risks. The forward markets in India also are very liquid up to one year.
Annual non-tradables inflation, which the Bank has considerable influence over, averaged 2.3 percent since 2013 and core inflation averaged 1.4 percent and remained within the 1 to 3 percent target band established for headline inflation. 16 Looking at the key relative prices in the economy we would have preferred a lower exchange rate over this period.