The domestic foreign exchange market has remained relatively stable, lending support to overall macroeconomic stability in a period of strengthening of the USD against other currencies and bouts of volatility in international foreign exchange markets.
The stability of the Indian rupee (INR) is reflected in a variety of indicators ranging from movement in real effective exchange rates, the exchange market pressure (EMP) index22 as well as volatility indicators such as implied volatility derived from option prices and onshore-offshore spreads as shown below.