International Financial Management: An Analytical Framework, 2nd Edition by Pearson

72 INTERNATIONAL FINANCIAL MANAGEMENT

enhancement in overseas borrowing limits of authorized dealers (Ads). The deferment of

QE tapering by the U.S. Fed and also the easing of geopolitical tension over Syria aided the

Indian rupee to make a turnaround.

Governments, through their respective central banks, may intervene in foreign

exchange operations with certain objectives. For example, a rise in the value of the Indian

rupee against the U.S. dollar will translate into a reduction in the INR prices of imports

from the United States. This will contribute to the slowing of inflation in India. Therefore,

if the Government of India aims at redu