The Transmission Protection Instrument (TPI) was introduced in July 2022. It aims to ensure that the monetary policy stance is transmitted smoothly across all euro area countries. The TPI therefore supports price stability while safeguarding financial stability by addressing unwarranted, disorderly market dynamics. At the same time, certain euro area countries are applying macroprudential policy for a targeted build-up of resilience.
Therefore, as India – like other emerging markets – has undoubtedly benefited from globalisation, we are also more exposed than before to vulnerabilities that come in its wake.