Exchange rate policies in China and India exacerbate economic instability
China and India tried to manipulate their exchange rates to boost exports, but this caused problems with their monetary policies. Both countries followed expansionary monetary policies in the early 2000s, leading to instability in their economies. From 1998 to 2007, they struggled to maintain undervalued exchange rates. India has moved away from fixed exchange rates, but still influences the market price of its currency.