Time does not permit me to go into it here, but it is important to point out that the different policy responses we saw across EMEs to the volatility in capital inflows were largely the outcome of their exchange rate policy framework. Countries that orient their exchange rate regimes to export competitiveness typically have current account surpluses.
This is a characteristic of the Asian EMEs and, in this sense, India is a significant exception to the Asian rule. These surpluses are reflected in a build-up of foreign exchange reserves, which may be further enhanced by large inflows of capital and the further accumulation of reserves to prevent currency appreciation, which undermines competitiveness in the short run.