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Download or read book Foreign Exchange Intervention Under the Integrated Policy Framework: The Case of India written by Jesper Lindé and published by International Monetary Fund. This book was released on 2024-11-15 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.