INSULATION OF INDIA FROM THE EAST ASIAN CRISIS: AN ANALYSIS

This paper investigates the effects of the East Asian crisis on the Indian economy and exchange rate movements. Despite the contagion effects that profoundly affected the other crisis-hit countries, the Indian economy and the rupee were found less affected. Reforms after the 1990–1991 crisis, control of capital flows, weak economic linkages with crisis-affected countries and stabilization policies that include intervention in the foreign exchange market and tightening of monetary policy are reasons for the insulation of the Indian economy from the crisis.