How to respond to foreign inflows

 In an earlier article (July 3), I examined the policy response to foreign exchange inflows in the 1990s.

 Conditions are now very different. Reserves have reached a very comfortable level but from 2001 onwards inflows have risen much faster than before. How should the authorities respond?

 It is the acceleration of inflows that has created awkward problems. In what follows, I shall, for the sake of brevity, often write