Foreign Exchange Intervention Under the Integrated Policy Framework: The Case of India

Author: Jesper Lindé, Mr. Patrick Schneider, Mrs. Nujin Suphaphiphat, and Hou Wang

Volume/Issue: Volume 2024 Issue 236

Publication date: November 2024

ISBN: 9798400292903

$20.00

Add to Cart by clicking price of the language and format you'd like to purchase

Available Languages and Formats


English

Prices in red indicate formats that are not yet available but are forthcoming.

Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Banks and Banking , Finance , Inflation , Economics- Macroeconomics , Integrated policy framework , foreign exchange intervention , risk-off shocks , EM FX intervention proxy , RBI FX intervention , FX Market development , OTC FX turnover , rate Policy , Currency markets , Inflation , Central bank policy rate , Global

Also of interest

Private Participation and its Discontents: Insights from Large-Scale Surveys

Central Bank Digital Currencies and Financial Stability: Balance Sheet Analys...

Demand for Ethanol Considering Spatially Differentiated Fuel Retailers

Public Investment Management Bottlenecks in Low-income Countries

Summary

This paper analyzes the effectiveness of foreign exchange intervention (FXI) in mitigating economic and financial shocks in India by applying the Integrated Policy Framework (IPF). It highlights how FXI can be a complementary tool in mitigating the tradeoff between output and inflation, specifically under large economic shocks amid temporarily shallow FX markets. The paper indicates that while FXI can soften adverse impacts on domestic demand and output during severe risk-off shocks, its benefits under normal conditions with liquid FX markets are limited.