scholarly journals U.S. monetary policy and China's exchange rate policy during the great recession

2018 ◽  
Vol 24 (1) ◽  
pp. 113-130 ◽  
Author(s):  
Juha Tervala
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Great Recession ◽  
Exchange Rate Policy ◽  
The Great Recession ◽  
Rate Policy

On the Exchange Rate Policy

2010 ◽  
pp. 21-28
Author(s):  
K. Yudaeva
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Exchange Rate Policy ◽  
Institutional Changes ◽  
Crisis Period ◽  
Local Currency ◽  
High Inflation ◽  
Rate Policy ◽  
The Exchange Rate

The level of trust in the local currency in Russia is very low largely because of relatively high inflation. As a result, Bank of Russia during crisis times can not afford monetary policy loosening and has to fight devaluation expectations. To change the situation in the post-crisis period Russia needs to live through a continuous period of low inflation. Modified inflation targeting can help achieve such a result. However, it should be amended with institutional changes, particularly development of hedging instruments.

Monetary and Exchange Rate Policy in Fragile States

2021 ◽  
pp. 367-405
Author(s):  
Christopher Adam ◽  
James Wilson
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Balance Of Power ◽  
Exchange Rate Policy ◽  
Fragile States ◽  
Policy Choices ◽  
Structural Fragility ◽  
Rate Policy ◽  
Proximate Causes

This chapter charts monetary and exchange rate policy aspects of countries’ descent into, and exit from, economic fragility and draws out some key normative policy lessons for fragile countries and their external partners. Choices around exchange rate regime and the conduct of monetary policy in fragile states will rarely be fundamental drivers of deep structural fragility, even though they may present as proximate causes. Nor are they likely to be decisive in driving the recovery from extreme fragility. However, monetary and exchange rate policy choices can and do play an important role in affecting movements into fragility as well as shaping potential exit paths. Moreover, choices in these domains affect the likely distribution of rents, including those generated by policy distortions themselves. In doing so, they alter the balance of power and can decisively shift the points of influence for policy, including by outside agents.

scholarly journals SINGAPORE'S EXCHANGE RATE POLICY: SOME IMPLEMENTATION ISSUES

2007 ◽  
Vol 52 (03) ◽  
pp. 445-458 ◽  
Author(s):  
HWEE-KWAN CHOW
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Policy Instrument ◽  
Exchange Rate Policy ◽  
Policy Framework ◽  
Successful Operation ◽  
Foreign Exchange Intervention ◽  
Rate Policy ◽  
The Exchange Rate

Reflecting the small open nature of its economy, Singapore has adopted an exchange rate-centered monetary policy framework since 1981. The exchange rate regime in Singapore is an intermediate regime that follows the basket-band-crawl system. With this managed float system, the MAS has successfully deterred speculators from attacking the domestic currency for most of the past three decades. At the same time, the flexibility accorded by the managed float system aided Singapore in escaping from the 1997–1998 Asian crisis relatively unscathed. In order to advance our understanding of the hitherto successful operation of Singapore's exchange rate policy, we examine the following three aspects of its implementation: (i) the use of the exchange rate instead of the interest rate as the key monetary policy instrument; (ii) the management of the currency basket in terms of foreign exchange intervention operations; and (iii) regulating the level of domestic liquidity alongside exchange rate policy. This paper also provides some insights on the challenges ahead that potentially face policymakers when implementing Singapore's exchange rate policy.

scholarly journals Monetary policy and exchange rate regime in tourist islands

2020 ◽  
pp. 135481662095949
Author(s):  
Federico Inchausti-Sintes ◽  
Ubay Pérez-Granja
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Exchange Rate Regime ◽  
Dynamic Stochastic General Equilibrium ◽  
Exchange Rate Policy ◽  
Monetary Policies ◽  
Rate Policy ◽  
Dynamic Stochastic ◽  
Travel Industry

The broad impact of the travel industry on economies has been comprehensively analysed in the tourism literature. Despite this, its consequences for monetary policy have remained unaddressed. This article aims at providing a first approach in this line for the case of three small tourist islands such as Cabo Verde, Mauritius and Seychelles. The research is based on a Bayesian estimation using a dynamic stochastic general equilibrium model (DSGE), and the optimal response to a tourism demand shock of four monetary policies is analysed. According to the results, both a conventional peg and an inflation-targeting policies achieve better economic performance. More precisely, the inflation is lower in the former. However, the rise in consumption and the gain in the external competitiveness are sharper in the latter. Finally, the other two policies, an inflation-targeting with managed exchange rate policy and an imported-inflation targeting policies, generate higher consumption and external competitiveness, but, also higher inflation and interest rate.

scholarly journals Notes on the Brazilian Crisis of 1997-99

2003 ◽  
Vol 23 (3) ◽  
pp. 376-404
Author(s):  
FRANCISCO L. LOPES
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Capital Controls ◽  
Critical Issue ◽  
Exchange Rate Policy ◽  
The Real ◽  
Diagonal Band ◽  
Rate Policy ◽  
The Exchange Rate

ABSTRACT This paper deals with the Brazilian crisis of 1997-98 that lead to the exchange rate floating of January 1999. It starts by showing how exchange rate policy evolved since the Real Plan of 1994 and how the exchange rate regime became a critical issue when the crisis started in 1997. It discusses monetary policy during the crisis, the IMF program, the endogenous diagonal band and the decision to float as an alternative to capital controls and default. This five-year drama ended surprisingly well with a benign float, but it is useful to know its details, with the usual mix of economic de- bate, personality clashes and historical fatality.

Beijing will move cautiously on exchange rate

2016 ◽  
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Unintended Consequence ◽  
Exchange Rate Policy ◽  
Market Volatility ◽  
Capital Flight ◽  
Stock Market Volatility ◽  
Monetary Policies ◽  
Content Type ◽  
Rate Policy

Subject China's exchange rate policy. Significance The fallout from the recent currency and stock market volatility has heightened fears that China's monetary policy decisions are reactive and uncoordinated. In response to the threat of capital flight, monetary policy has tended towards control, but these controls are increasingly costly, both in monetary and welfare terms. In assessing these costs, however, distinction must be made between using reserves to defend the renminbi's value, legitimate policy-supported outward investment and capital flight. Impacts Even without devaluation, exported deflation will be an unintended consequence of China's current monetary policies. Officials are well aware of the dangers posed by a substantial once-off Plaza Accord-style devaluation. A large devaluation would damage the renminbi's prospects as an international reserve and settlement currency. Devaluation would have a significant impact on the monetary policy of other countries, most notably Japan.

scholarly journals Why monetary board: Monetary board and endogenic price flexibility

2004 ◽  
Vol 49 (162) ◽  
pp. 175-188
Author(s):  
Tamara Basic
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Optimal Policy ◽  
Flexible Exchange Rate ◽  
Exchange Rate Policy ◽  
Optimal Monetary Policy ◽  
Rate Policy ◽  
Price Flexibility ◽  
The Difference ◽  
Initial Price

The paper presents a model which proves that a unilateral exchange rate fixing, i.e. monetary board, as opposed to certain opinions, is an optimal policy since it increases flexibility of nominal prices, which is the ultimate goal of a flexible exchange rate policy. A suitable calibration of the model shows that the higher the initial price flexibility, the lower the difference needed for "utility increase" in getting the producers to switch from fixed to flexible prices. The results obtained in all cases indicate that exchange rate fixing increases price flexibility, which proves that a unilateral exchange rate fixing, i.e. monetary board, could be an optimal monetary policy.

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