the recent period of turmoil. there is, however, no room for complacency. the regulator and the regulated entities must remain alert and future ready for the emerging challenges. external sector stability 20. india ’ s external sector has also exhibited strength and stability in the recent period. the current account deficit ( cad ) has remained within the manageable limit and stood at 1. 1 per cent of gdp in q1 : 2024 - 25 ( 0. 7 per cent in fy 2023 - 24 and 2. 0 per cent in fy 2022 - 23 ). during the first half of 2024 - 25, india ’ s merchandise exports recovered from a contractionary zone in 2023 - 24. services exports have remained buoyant and rose by 11. 0 per cent during h1 : 2024 - 25 ( 4. 8 per cent in fy 2023 - 24 ). the robust growth in services exports, coupled with buoyant private remittances, are helping to contain the current account deficit. 21. on the financing side, net capital inflows have been generally exceeding the cad and contributing to accretion in foreign exchange reserves. india has the fourth largest foreign exchange reserves in the world at us $ 682 billion as on october 31, 2024, sufficient to cover the entire external debt 7 and about 12 months of merchandise imports. 8 in terms of other key external sector indicators such as external debt to gdp, net 7 at end - june 2024. 8 annualised merchandise imports on balance of payments basis. international investment position ( iip ) and short - term debt to external debt, india ’ s position remains resilient. 22. our exchange rate policy is well - articulated and has remained consistent over the years. india ’ s exchange rate regime is market - determined, and the reserve bank does not target a level or band of the exchange rate. the forex interventions are carried out to ensure an orderly movement of the exchange rate and to curb undue volatility, anchor market expectations and ensure overall financial stability. 23. it is important to note that the exchange rate is also a barometer of an economy ’ s inherent strength. if the indian rupee ( inr ) has remained relatively stable despite severe external shocks including the largest and steepest tightening by the fed in 2022 and 2023, it speaks volumes about the sea change in our macro fundamentals from the taper tantrum days. 24. in

also expressed shortly after the end of world war ii. it was winston churchill, who in 1946 in zurich, argued in favour of “ a kind of united states of europe ”. in april of that same year, the need for a single european currency was voiced by the new post - war president of the nederlandsche bank, marius wilhelm holtrop, who wanted a strong and sound guilder which in due course would merge into one european currency. the past fifty years have shown, that the advent of a single european currency will certainly not include the “ united states of europe ” that churchill was talking about. soon after 1946, europe became politically divided into eastern and western hemispheres due to the cold war. with the foundation of the european economic community ( eec ) in 1957, western europe took the lead by starting economic cooperation. the objective of the treaty of rome, on which the eec was based, was to create a common market between france, west germany, italy and the benelux countries. this objective resulted in a customs union which became effective on 1 july 1968. however, the treaty remained vague about other aspects of economic cooperation. economic policy, for example, was considered a matter of common interest. as regards monetary cooperation, coordination was recommended, the exchange rate policy being regarded as a matter of common interest as well. the plan for economic integration designed in rome was not an objective in itself. it was based on political grounds. after all, the treaty aimed at achieving an “ ever closer union among the european peoples ” through economic integration. during the 1969 summit in the hague, representatives of the six member states agreed with the idea of the newly elected german chancellor willy brandt that this had to be realised via economic and monetary union ( emu ). the then prime minister of luxembourg, paul werner, came up with a detailed plan that was named after him. according to this plan, emu would be materialised in stages. in the final stage, monetary and budgetary competences of the national states were to be transferred to community bodies established for that purpose. and so, werner ’ s ideas were considerably more far - reaching than the agreements reached in rome thirteen years earlier. nonetheless, the philosophy of economic integration advocated in rome remained the moving spirit behind political cooperation : “ it is true that we need not achieve a european confederation or federation tomorrow. but to arrive at this ultimate goal, we must first take the step of creating an economic and monetary currency union ”, werner