Exchange Rate Policy
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- Exchange Rate Policy
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Bibliographic details
- Session: JV 24.17
- Location: Vienna, Austria
- Dates: June 3-14, 2024 (2 weeks)
- Delivery method: In-person Training
- Primary language: English
- Interpretation language: Russian
- Status: Deadline passed
Overview
- Training Program presented by the Institute for Capacity Development covering exchange rate analysis and policy.
- Session No.: JV 24.17
- Deadline passed
Logistics
- Location: Vienna, Austria
- Date: June 3-14, 2024 (2 weeks)
- Delivery Method: In-person Training
- Primary Language: English
- Interpretation Language: Russian
- Target Audience: Junior to mid-level officials who work with exchange rate policy and analysis.
Qualifications
- Participants are expected to have an advanced degree in economics or equivalent professional experience.
- Participants are expected to be comfortable with Microsoft Excel and Excel-based applications.
- Participants are expected to have a working knowledge of EViews.
Course Content
- Key exchange rate concepts:
- real, nominal, bilateral, multilateral, spot, forward
- arbitrage conditions: UIP, law of one price, PPP, relative PPP
- role in achieving internal and external balance: adjustment to overall equilibrium under floating and fixed exchange rate regimes
- role in economic growth: undervaluation, Washington Consensus, the Balassa-Samuelson effect
- Exchange rate policy and regimes:
- taxonomy, impossible trinity
- associated policy mix: monetary policy independence, financial stability, fiscal policy, capital controls
- Practical problems in Developing and Emerging Market Economies:
- concerns of excessive volatility
- de jure vs. de facto regimes
- competitiveness, price stability
- exchange-rate pass-through
- targets and instruments
- Transitions from rigid to flexible exchange rate regimes:
- motives; speed of transition
- need for deep and liquid domestic FX markets, derivatives markets
- coherent intervention policy, nominal anchor; transition sequence
- FX interventions:
- sterilized or non-sterilized
- motivations, channels, effectiveness, instruments, tactics, policy communication
- Currency crisis:
- causes, role of macroeconomic and prudential policies
- Assessing reserve adequacy:
- External Balance Assessment:
- Early warning system
Course Objectives
- Assess reserve adequacy with traditional and the IMF ARA metric.
- Assess external balance position with EBA and EBA-lite methodologies.
- Construct systems for early warning of currency crises using data on nominal exchange rates and international reserves.
- Describe the exchange rate regime choice and how country-specific features could influence the choice.
References