The Reserve Bank of India (RBI) says it follows a "managed float" for the rupee, implying that it guides the currency against a basket of currencies of India's major trade partners.

But an analysis from Tony Cavoli of the University of Adelaide and Ramkishen S Rajan from Singapore's Lee Kuan Yew school of Public Policy suggests that the central bank guides the rupee's exchange rate against the US dollar.

In contrast, the Monetary Authority of Singapore (MAS) manages the Singapore dollar against a basket of currencies of its top trade partners, the study found, confirming Singapore's official stance.

"The Indian rupee appears to be a de facto US dollar peg while the Singapore dollar is a genuine basket pegger," Cavoli said, presenting the paper at the Singapore Economic Review Conference.

"The degree of influence of the US dollar on the rupee is quite high."

Central bank officials often cite the rupee's real effective exchange rate (REER) to indicate that the rupee is overvalued or undervalued against a basket of currencies of its main trade partners.

"The perception that RBI is targetting the REER is not right," said Rajan. "Since 1996, that's not true. That's not what we find."

Other currencies have a negligible influence on the rupee, he said, although the euro is gradually gaining in importance.

"The euro is becoming more important at the expense of the pound sterling and the yen," Cavoli said.

For the Singapore dollar, the Japanese yen has been growing in influence since 1998, he said.

The study also found that the degree of flexibility in currency movements allowed by the Monetary Authority of Singapore was lower than that allowed by the Reserve Bank of India.