In 1991, we had a liquidity crisis in currency, mainly due to the war in Iraq and the breakdown of trade with USSR, but we preferred to pledge gold, initiate a massive import compression and start a reform process with assistance from the IMF and the World Bank. The entire burden of crisis and adjustment was successfully borne by the domestic economy.
In the current environment of financial turbulence, and also a possible unwinding of macro imbalances, India plays a stabilising role with a modest current account deficit in most of the  BIS Review 45/2008  1  recent years, at around one per cent 1 of GDP, and a market determined exchange rate.