The obvious response that springs to one’s mind is intervention by the central bank. Intervention, however, is to be used only in extreme situations and cannot be a part of the policy framework.
Intervention has got costs and other implications like negative carry of the foreign exchange reserves, interference with the monetary policy framework, cost of sterilization of intervention operations, etc., depending upon whether intervention consist of buying or selling foreign exchange. The strategy, therefore, seems to be a combination of some capital controls and flexible exchange rate.