The fact that emerging markets have accumulated many more substantial reserves than they held, for instance, in the 1990s or early 2000s, suggests that markets will be able to function in more orderly ways, and that large, long-term investors will feel comfortable trading in those markets. Monetary policy The exchange-rate policy fits within the broader policy of inflation targeting.
Inflation targeting provided us with a policy goal more realistic than the previous eclectic approach to policy, because we could hit it. That goal was also more meaningful for citizens, because we could focus on protecting the buying power of regular consumers in domestic markets – as opposed to, say, trying to hold down the costs of holidays in New York.