Does Full Sterilization Feasible in Era of Excess Volatility: Evidence from India

Chandan Sharma

Economics Bulletin, 2009, vol. 29, issue 4, 2944-2950

Abstract: India has accumulated a huge pile of international reserves, which is certainly more than the country's precautionary requirements. In this study, I test the extent and impact of the sterilization in India by using Toda and Yamamoto version of Granger Causality and Impulse Response function. The results of the analysis reveal that in India, the central bank (RBI) has been pursuing the sterilization policy, however, not able to fully insulate the domestic market from the external shocks.

Keywords: Sterilization; Money Supply; India. (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Date: 2009-11-24
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