ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -During the period 1947 till 1971, India followed the par value system of the exchange rate whereby the rupee’s external par value was fixed at 4.15 grains of fine gold. The RBI maintained the par value of the rupee within the permitted margin of ±1% using pound sterling as the intervention currency.

Detailed explanation-2: -Par Value system refers to the international monetary practice of member countries fixing the value of their currency against Gold or US Dollar. The Par value system was followed under the Bretton Woods System.

Detailed explanation-3: -The Bretton Woods Agreement and System Explained The Bretton Woods Agreement and System created a collective international currency exchange regime that lasted from the mid-1940s to the early 1970s.

Detailed explanation-4: -Currently India has adopted the managed exchange rate system. In 1967, gold was displaced by creating the Special Drawing Rights (SDRs), also known as ‘paper gold’, in the IMF as a replacement to gold as an international reserve standard. However, SDRs were defined in terms of gold.

Detailed explanation-5: -This is a list of tables showing the historical timeline of the exchange rate for the Indian rupee (INR) against the special drawing rights unit (SDR), United States dollar (USD), pound sterling (GBP), Deutsche mark (DM), euro (EUR) and Japanese yen (JPY). The US dollar was worth ₹3 in 1947 not 1, and ₹69.9 in 2018.