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East Asian Crisis and Currency Pressure: The Case of India

Author

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  • Pami Dua

    (Department of Economics, Delhi School of Economics, Delhi, India and Economic Cycle Research Institute, New York)

  • Arunima Sinha

    (Department of Economics, Columbia University, New York, NY)

Abstract

This paper tests and explains the impact of the East Asian crisis on India’s exchange rate. To examine this, an index of currency pressure is estimated for four countries -- Thailand, South Korea, Malaysia and India covering the period just before, during and after the crisis. A contagion model with panel data for these four countries is also estimated during the crisis period. On the basis of the panel data estimates, the paper concludes that while India experienced some effects of the crisis, these were not substantive. This is partly attributed to the role of stabilisation policy in India that included intervention in the foreign exchange market by the central bank, phased tightening of monetary policy and restrictions on capital flows.

Suggested Citation

  • Pami Dua & Arunima Sinha, 2007. "East Asian Crisis and Currency Pressure: The Case of India," Working papers 158, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:158
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    References listed on IDEAS

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    Cited by:

    1. Angelina Gurunathan & Ravichandran Moorthy, 2021. "Riding the Indo-Pacific Wave: India–ASEAN Partnership Sans RCEP," India Quarterly: A Journal of International Affairs, , vol. 77(4), pages 560-578, December.
    2. Pami Dua & Arunima Sinha, 2007. "Insulation Of India From The East Asian Crisis: An Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 52(03), pages 419-443.
    3. Saidia Jeelani & Joity Tomar & Tapas Das & Seshanwita Das, 2019. "Testing Structural Break in the Relationship Between Exchange Rate and Macroeconomic Variables," Vision, , vol. 23(4), pages 442-453, December.
    4. Santosh Kumar & Ranjit Tiwari, 2021. "Does the fundamental indexation portfolio perform better? An Indian investigation," Accounting Research Journal, Emerald Group Publishing Limited, vol. 35(2), pages 121-144, June.

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