Dread of Depreciation: Measuring Real Exchange Rate Interventions
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Summary:
We specify an empirical framework to detect the effects of official intervention on real exchange rate dynamics. Using data for 27 advanced and emerging market economies, we find evidence that interventions are a near-universal practice; almost all countries intervene when real exchange rates depreciate; interventions reduce the degree of persistence in real exchange rates; and the defense of an overvalued currency tends to be contractionary.
Series:
Working Paper No. 2002/063
Subject:
Emerging and frontier financial markets Exchange rates Financial markets Foreign exchange Purchasing power parity Real effective exchange rates Real exchange rates
English
Publication Date:
April 1, 2002
ISBN/ISSN:
9781451848434/1018-5941
Stock No:
WPIEA0632002
Pages:
36
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