Q. In which year Liberalized Exchange Rate Management System (LERMS) was launched in India?
Answer: 1992
Notes: Government of India introduced the Liberalized Exchange Rate Management System (LERMS) in March 1992. The new system was announced by Manmohan Singh in the 1992 budget and, in early March, by the Reserve Bank of India (RBI). LERMS was the first step to enable a transition to a market-determined exchange rate system. In 1993, India introduced a revised version of LERMS called Modified Liberalized Exchange Rate Management System (M-LERMS). Since March 1993, India has been operating on a managed floating exchange rate regime. This marks the start of a market-determined exchange rate regime of the rupee with provision for timely intervention by the central bank. India has been using the direct method of quotation for exchange rates since August 1993.
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