POLITICS-Shaky Structure

months of 1995 against Rs 2,972 crore during the whole of 1994). The foreign exchange reserves (other than gold) standing at $19,075 million appear comfortable. Despite these developments, the RBI has chosen not to react though the rupee has depreciated beyond the 5 per cent limit. This is not in keeping with its declared policy which has been reiterated in its latest Annual Report: "The Reserve Bank quotes its buying and selling rates which arc in tune with the market rates and which can move within a 5 per cent band of the prevailing market rates. The RBI at its discretion intervenes in the market, to ensure that orderly conditions prevail in the market." All these norms seem to have been violated by the recent movements in the rupee's exchange rate without evoking a reaction from the central bank.