Monetary Policy, Foreign Exchange Policy, and Delayed Overshooting

2005 ◽  
Vol 37 (4) ◽  
pp. 775-782 ◽  
Author(s):  
Soyoung Kim
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Exchange Policy

scholarly journals Monetary policy effect in an economy with heavily managed exchange rate

2017 ◽  
Vol 24 (02) ◽  
pp. 31-50
Author(s):  
Trung Bui Thanh
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Foreign Exchange ◽  
Primary Objective ◽  
Change Rate ◽  
Policy Effect ◽  
Monetary Authorities ◽  
Exchange Policy ◽  
Monetary Policy Shock ◽  
Effect Of Monetary Policy

The primary objective of this paper is to investigate the effect of monetary policy on macroeconomic variables in Vietnam, which is a small, open, and developing economy with heavily managed ex-change rate. Monetary policy shock is identified by the sign re-striction methodology. Unlike previous studies, this paper identifies a monetary contraction by a combination of an increase in interest rates, a decrease in central bank credit, a drop in the stock of foreign exchange reserves, and a fall in broad money. The empirical results show that output and prices begin to reduce after a restrictive mone-tary shock in the medium term, suggesting the adverse effect of monetary policy in the short term and the necessity to improve the transparency of monetary setting. Meanwhile, exchange rates are unresponsive to a tightening decision, which is not a sign of puzzle but plausible when the nature of a peg regime is taken into account. Furthermore, foreign exchange policy causes inflation to rise since its effect is partially sterilized by changes in monetary policy instru-ments. Therefore, Vietnamese monetary authorities should consider a shift toward a more floating regime to achieve monetary inde-pendence or foster the development of financial markets in order to alleviate inflationary pressure caused by foreign exchange policy.

scholarly journals REFLEXIONES Y PERSPECTIVAS A 25 AÑOS DE LA AUTONOMÍA DEL BANCO DE MÉXICO

2019 ◽  
Vol 78 (310) ◽  
pp. 11 ◽  
Author(s):  
Jonathan Heath ◽  
Jaime Acosta Margain
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Foreign Exchange ◽  
International Reserve ◽  
Policy Framework ◽  
Price Stability ◽  
Reserve Management ◽  
Exchange Policy ◽  
Communication Policies ◽  
Monetary Policy Framework

<p>En este artículo se hace una serie de reflexiones sobre los retos y logros que el Banco de México ha enfrentado en sus primeros 25 años de vida autónoma. Se detallan los elementos claves en el diseño institucional para el cumplimiento de su mandato prioritario: la estabilidad del poder adquisitivo de la moneda. En particular, se destaca la evolución de los cambios en el régimen monetario y en la instrumentación de la política monetaria para alcanzar ese fin. De igual manera, se comentan otros aspectos que han sido relevantes en este periodo de la vida autónoma del banco central, tales como la política cambiaria, el manejo de las reservas internacionales, así como la política de rendición de cuentas y la estrategia de comunicación.<br /><br /></p><p>REFLECTIONS AND PERSPECTIVES AT 25 YEARS OF THE AUTONOMY OF THE BANCO DE MÉXICO</p><p><br /><strong>ABSTRACT</strong><br />This paper describes the challenges and achievements that Banco de México has faced during its first twenty-five years of autonomy. The paper offers some insights about key institutional features that were decisive in fulfilling the central bank’s main mandate: Price stability. The article also outlines the evolution of the monetary policy framework and the central bank operations in order to achieve the central bank main goal. Similarly, other elements such as foreign exchange policy, international reserve management, accountability and communication policies are also discussed.</p>

scholarly journals Valuutakontrolli rakendamine Eestis 1930. aastatel [Abstract: Implementation of exchange control in Estonia in the 1930s]

2017 ◽  
pp. 79
Author(s):  
Karl Stern
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Trade Balance ◽  
Foreign Currency ◽  
Course Of Action ◽  
Negative Effect ◽  
National Bank ◽  
Exchange Policy ◽  
Almost All ◽  
Exchange Control

Exchange control is generally managed by the national bank. Exporters have to transfer all of their earnings from foreign exchange to the national bank. The national bank considers different factors in redistributing foreign exchange among importers. After the devaluation of the British pound in the autumn of 1931, cash cover for Estonia’s currency decreased rapidly. The leaders of monetary policy ignored the statutes of the National Bank of Estonia and urgently decided to implement exchange control. The implementation of exchange control did not go very smoothly during its first years. Hurried implementation and lack of preceding explanation caused problems for entrepreneurs and citizens who were in need of foreign exchange. At first there was a great deal of dissension between the National Bank of Estonia and the Ministry of Economic Affairs. The ministry issued import licenses to importers but often the National Bank did not want to sell them any foreign currency (to be used to pay for goods) regardless of their legitimate licenses. The bank’s rationale for this course of action was the low level of cash cover for Estonia’s currency. This fact confirms the opinion prevalent in previous historiography that in its first years, exchange control was implemented for monetary policy purposes. Exchange control influenced almost everybody who needed to use foreign currency. Reasons had to be given even for the purchase of smaller amounts of foreign exchange. After the devaluation of Estonia’s currency in the summer of 1933, exchange control was used to protect the interests of Estonian foreign trade. The Ministry of Economic Affairs and the National Bank started collaborating more efficiently. National Bank Exchange Commission decisions approving exchange applications demonstrate this as well. The commission accepted almost all applications for foreign exchange after the devaluation. The number of applications nearly doubled during the second half of the 1930s. Cash cover for Estonia’s currency increased and the National Bank’s exchange policy became more liberal. After the devaluation, one of the important criteria for giving foreign exchange to importers was the trade balance between the source country and Estonia. Preference was given to traders who imported goods from countries with which Estonia had a positive trade balance. Comparison of export and import in the 1930s shows that in general, Estonia managed to maintain its trade balance. At the same time, exchange control had a negative effect on incentives. In countries where exchange control was implemented, trade volume recovered more slowly in the latter half of the 1930s than in countries where it was not implemented.

Actual Problems of Economic Policy

2003 ◽  
pp. 23-38 ◽  
Author(s):  
M. Ershov
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Foreign Exchange ◽  
World Economy ◽  
Domestic Economy ◽  
The World ◽  
Exchange Policy ◽  
Effective Integration

At present Russia faces the task of great importance - effective integration into the world economy. The success of this process largely depends on the strength of the domestic economy and stable economic growth. To attain such a goal certain changes in economic approaches are required which imply more active, focused and concerted steps in the monetary, fiscal and foreign exchange policy.

Foreign Exchange Policies of PRC: Historical Aspect

2014 ◽  
pp. 24-31
Author(s):  
A. Binder ◽  
A. Kononov
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Perspective Taking ◽  
Historical Perspective ◽  
Chinese Economy ◽  
Historical Aspect ◽  
Distinctive Features ◽  
The World ◽  
Exchange Policy

The article analyzes the distinctive features of the PRC foreign exchange policy from the historical perspective, taking the national color into account and emphasizing the traditions-modernity unity in its strategy. It reviews the debates over renminbi exchange rate, disclosing the weakness of the modern international foreign exchange law. It systemizes the practices of international pressures applied to China in this aspect. It is stated, that China’s foreign exchange reforming process is of a long-term nature, and it will be completed only by the time the Chinese economy gets adjusted to the world market’s requirements.

MÜASİR ŞƏRAİTDƏ AZƏRBAYCANIN VALYUTA SİYASƏTİNİN TƏKMİLLƏŞDİRİLMƏSİ VƏZİFƏLƏRİ VƏ İSTİQAMƏTLƏRİ

2020 ◽  
Vol 54 (05) ◽  
pp. 122-125
Author(s):  
Kamil Sayavush Demirli ◽  
Keyword(s):  
Monetary Policy ◽  
Key Words ◽  
Foreign Exchange ◽  
Oil And Gas ◽  
Balance Of Payments ◽  
International Capital ◽  
Foreign Exchange Reserves ◽  
Commodity Trade ◽  
Transit Service ◽  
Gas Balance

Key words: monetary policy, commodity trade foreign exchange reserves, balance of payments, oil and gas, balance, transportation, transit service, international, capital, perspective

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