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How high is exchange rate pass-through in India? Has it changed over time?

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  • Amit Ghosh
  • Ramkishen S. Rajan

Abstract

Concerns about relatively high degrees of exchange rate pass-through in a number of emerging economies have contributed to a fear of floating. Despite the obvious policy relevance of this issue there is hardly any existing literature that has examined aggregate CPI pass-through for India, which has been liberalizing its economy since 1991. This paper estimates exchange rate pass-through (ERPT) at the aggregate level into India's CPI for the period 1980Q1 - 2005Q3. We also analyze whether exchange rate pass-through in India has changed over time, particular since 1991, which was the beginning of the country's economic liberalization program.

Suggested Citation

  • Amit Ghosh & Ramkishen S. Rajan, 2007. "How high is exchange rate pass-through in India? Has it changed over time?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(3), pages 373-382.
    • Handle: RePEc:taf:jitecd:v:16:y:2007:i:3:p:373-382
    DOI: 10.1080/09638190701526832
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    Citations

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    Cited by:

    1. Ranajoy Bhattacharyya & Bipradas Rit, 2018. "On the Relationship between the Nominal Exchange Rate and Export Demand in India," South Asian Journal of Macroeconomics and Public Finance, , vol. 7(2), pages 260-282, December.
    2. Ganapati Mendali & Sanjukta Das, 2017. "Exchange Rate Pass-through to Domestic Prices," Foreign Trade Review, , vol. 52(3), pages 135-156, August.
    3. Yanamandra, Venkataramana, 2015. "Exchange rate changes and inflation in India: What is the extent of exchange rate pass-through to imports?," Economic Analysis and Policy, Elsevier, vol. 47(C), pages 57-68.
    4. Rucha R. Ranadive & L.G. Burange, 2015. "Transmission Mechanism of Exchange Rate Pass-through in India," Foreign Trade Review, , vol. 50(4), pages 263-283, November.
    5. Bakhshoodeh, M., 2010. "Impacts of world prices transmission to domestic rice markets in rural Iran," Food Policy, Elsevier, vol. 35(1), pages 12-19, February.
    6. Ghosh, Amit & Rajan, Ramkishen S., 2009. "Exchange rate pass-through in Korea and Thailand: Trends and determinants," Japan and the World Economy, Elsevier, vol. 21(1), pages 55-70, January.
    7. Mohammad Shakeri & Richard S. Gray, 2013. "The Industry Determinants of Exchange Rate Pass-Through into Canadian Producer Prices," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 20(1), pages 15-38, February.
    8. Bhattacharya, Rudrani & Patnaik, Ila & Shah, Ajay, 2011. "Monetary policy transmission in an emerging market setting," Working Papers 11/78, National Institute of Public Finance and Policy.
    9. Javed Ahmad Bhat & Md Zulquar Nain & Sajad Ahmad Bhat, 2024. "Exchange rate pass‐through to consumer prices in India – nonlinear evidence from a smooth transition model," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 927-942, January.
    10. Mallick, Sushanta & Marques, Helena, 2010. "Data frequency and exchange rate pass-through: Evidence from India's exports," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 13-22, January.
    11. Baharumshah, Ahmad Zubaidi & Soon, Siew-Voon & Wohar, Mark E., 2017. "Markov-switching analysis of exchange rate pass-through: Perspective from Asian countries," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 245-257.
    12. Sengupta, Darpajit & Sinha Roy, Saikat, 2020. "Exchange Rate Pass-through: An exploration on India’s automobile sector," MPRA Paper 102533, University Library of Munich, Germany.
    13. Arshid Hussain PEER & Mirza Allim BAIG, 2023. "Inflation targeting and exchange rate pass-through in India: Lessons from international experience," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(634), S), pages 239-254, Spring.

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