That is, persistent deviations of money growth from the reference value might influence monetary policy by raising questions about the consistency of policy with its objectives and thereby encouraging a reassessment of that policy.
Going forward, however, things were normalized as a result of the Plaza Accord between G-5 countries. Adoption of capital account convertibility leads inevitably to the so-called “Impossible Trinity” which involves having to choose between an autonomous exchange rate policy and interest rate/monetary policy. In an increasingly open capital account context, the appropriate exchange rate regime would be a flexible exchange rate regime.