Second, monetary policy has generally been fairly easy in many of these countries, because of the link – explicit or implicit – that they have to the US dollar. In some of the oil-producing Gulf states, where there are explicit dollar pegs, demand growth is very strong and inflation has increased.
The timely gesture enabled India to maintain its impeccable reputation of unfailingly discharging its external obligations, and proceed with the program of stabilisation as well as reforms. In fact, that period has been a defining moment in our economic history and separates the pre-reform period from the post-reform period, the latter ushering in an era of high growth and stability.