Developed countries have learned to live successfully with this, but it is harder going for emerging countries with big capital flows. The best-practice regime commonly used in developed countries allows wide latitude for the market to set the rate, supported by occasional intervention and rather more frequent help from interest rates.
Many emerging countries could benefit from moving to this generic type of regime, and to help this process, we need a vigorous debate about when to intervene (and, more importantly, when not to); what role interest rates and inflation targets might play; and what additional measures might help to handle large and volatile capital flows.