Prior to 1993, the rupee was fixed to the US Dollar. After
1993, the rupee floated against the US Dollar, with the Reserve
Bank of India intervening if the value rose or fell too quickly (a
managed float exchange rate regime).
Did the fixed exchange rate regime intensify or dampen fiscal
policy? Explain your reasoning process.
Do you think India should maintain a fixed exchange rate or a
floating exchange rate against the US Dollar? Why?
What are the drawbacks of your chosen exchange rate
regime?