Exchange Rate Regimes and Macroeconomic Performance in South Asia

We review the macroeconomic performance in South Asian countries, and analyse why, despite opening out at a time of major international shocks, they have done reasonably well. The reason may be a gradual middling through approach that combined opening and market development. The choice of flexible exchange rate regimes with restrained volatility contributed. But the exchange rate was not undervalued, unlike China. The region largely had a current account deficit.