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Managing Capital Flows In Intermediate Regimes: The Case Of India

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  • RENU KOHLI

    (Indian Council for Research in International, Economic Relations (ICRIER), New Delhi, India)

Abstract

Managing capital flows is the key policy challenge for emerging economies like India in the aftermath of the crisis. In contrast to other emerging markets who are levying capital controls, India's macro-monetary framework is distinguished by significant restrictions that help manage inflows. Against this context, the paper characterises India's capital account management strategy through illustrating the 2006–2007 episode of capital inflows in the buildup to the global financial crisis. It shows how these restrictions allowed the authorities to straddle the open-economy trilemma and balance the exchange rate and price stability objectives. It offers relevant evidence on the effectiveness of India's capital controls in retaining monetary autonomy.

Suggested Citation

  • Renu Kohli, 2011. "Managing Capital Flows In Intermediate Regimes: The Case Of India," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 351-371.
    • Handle: RePEc:wsi:jicepx:v:02:y:2011:i:02:n:s1793993311000348
    DOI: 10.1142/S1793993311000348
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    References listed on IDEAS

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    More about this item

    Keywords

    Capital flows; capital account liberalisation; monetary independence; India; trilemma; E5; E58; F3; F36; G15; G18; O16;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F3 - International Economics - - International Finance
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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