In brief, the experience of these countries should provide some lessons for us in terms of potential risks. Of immediate relevance to us is the impact of their devaluation on export competitiveness if the rupee continues to appreciate. BIS Review 76/1997  -6-  Capital Inflow 13. Capital inflows constitute a major factor affecting the value of the rupee now.
In any scenario, policymakers must do their utmost to build a bridge over the troubled times, in order to prevent a sharp rise in bankruptcies and job losses. Mostly, the policy response has been swift.