ranjan

Prior to the period of economic liberalisation in 1990s, India followed a fixed Exchange rate system. Indian Rupee was linked to U.S dollar and a basket of other currencies. India started having balance of payment problems since 1985 and by the end of 1990 it found itself in a serious economic trouble. The purchasing power of U.S dollar higher due to low inflation. It is subjected to Demand and Supply of resources and for developed countries it is normally low because over a period of many years, a certain stability has been achieved with, estimating the demand and supply constraints. These countries have taken proper measures to regulate the demand of such tight resources and Goods and Services by establishing proper trade channels. In developing countries like India, Brazil etc. which are still growing, estimation processes can vary as much as 20%; due to demographical variations. Also, to meet various demands of consumers, when we import more goods we also import inflation, inc