Capital Flows and FX Policy

Analyze how large and persistent capital inflows shape a country's exchange-rate regime, monetary autonomy, inflation dynamics, and fiscal space. Compare sterilized and non-sterilized policy responses, assess risks from sudden reversals, and outline a menu of tools (sterilization, reserve management, macroprudential measures, and communication strategies) that help preserve stability while supporting investment and growth. Include cross-country learning by contrasting different currencies' experiences with similar inflows.