Exchange Rate Policy (ERP)
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- Exchange Rate Policy (ERP)
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Bibliographic details
- Session: ST 24.20
- Location: Singapore, Singapore
- Dates: December 2-13, 2024 (2 weeks)
- Delivery method: In-person Training
- Primary language: English
- Status: Deadline passed
Program details
- Session No.: ST 24.20
- Location: Singapore, Singapore
- Date: December 2-13, 2024 (2 weeks)
- Delivery Method: In-person Training
- Primary Language: English
- Deadline passed
- Presented by the Institute for Capacity Development
Target audience and qualifications
- 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 also have a working knowledge of EViews.
Course description — topics covered
- Key exchange rate concepts (real, nominal, bilateral, multilateral, spot, forward) and arbitrage conditions (UIP, law of one price, PPP, relative PPP); its role in achieving internal and external balance (adjustment to overall equilibrium under floating and fixed exchange rate regimes); its role in economic growth (undervaluation, Washington Consensus, the Balassa-Samuelson effect).
- Exchange rate policy and regimes (taxonomy, impossible trinity) and associated policy mix (monetary policy independence, financial stability, fiscal policy, capital controls).
- Practical Problems of Exchange Rate Policy 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 rates regimes (motives; speed of transition; 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 (ARA).
- External Balance Assessment (EBA).
- Early warning system.
Course objectives — skills and capabilities on completion
- 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