36 INTERNATIONAL FINANCIAL MANAGEMENT
In the spot market, the bid–ask spread ranges between 0.25 of a paisa to1 paisa, while swap
quotes are available at a 1- to 2-paisa spread.
Market Turnover
The Indian foreign exchange market has witnessed a phased transition from a pegged
exchange rate regime to a market-determined exchange rate regime. The government has
permitted current account convertibility since 1994 and there has been substantial liber-
alization in capital account transactions. It has progressively liberalized foreign exchange-
related transactions by removing restrictions and simplifying procedures. There has been
significant liberalization of outflows, especially foreign investments made by individuals,
corporations, and mutual f ...