Various combinations of these features have dominated world monetary arrangements in different eras. The question of how developing and emerging-market countries like ours should resolve the trilemma is very crucial. At best a medium-term goal of achieving free capital mobility could be set with measured steps and optimal control.
Recent policy initiatives India adopted a gradualist approach while initiating a process of gradual capital account liberalisation in the early 1990s and treated it as a process rather than an event. In recent past, there has seen significant changes in the external sector policy of the Reserve Bank.