Moreover, we have the flexibility to allow the exchange rate to absorb some of the shocks from capital inflows, or if the flows go the other way, we have ample reserves, to keep exchange rate volatility in check, consistent with our inflation targeting framework.
Learning from our previous experience during the Asian and global financial crises, the limitation imposed by the impossible trinity 3 could actually work to our advantage. First, flexible exchange rates act as an automatic stabilizer and contain wild swings in the financial markets.