Economics · Foreign Exchange Market

Which of the following statements correctly explains the evolution of the foreign exchange (forex) market in India? Statement 1: Before 1978, banks were permitted to undertake only merchant transactions and cover operations in forex. Statement 2: In 1978, banks were allowed to take trading positions but were required to keep their positions square or near-square throughout the day. Statement 3: From 1978 onwards, banks were allowed to take trading positions, and they were required to maintain square or near-square positions only at the end of the day. Statement 4: Post-liberalisation in the 1990s, India moved towards current account convertibility, leading to a surge in forex market turnover.