Exchange Market Pressure, Currency Crises, and Monetary Policy : Additional Evidence From Emerging Markets

Author/Editor:

Evan C Tanner

Publication Date:

January 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper extends my previous work by examining the relationship between monetary policy and exchange market pressure (EMP) in 32 emerging market countries. EMP is a gauge of the severity of crises, and part of this paper specifically analyzes crisis periods. Two variables gauge the stance of monetary policy: the growth of central bank domestic credit and the interest differential (domestic versus U.S. dollar). Evidence suggests that monetary policy plays an important role in currency crises. And, in most countries the shocks to monetary policy affect EMP in the direction predicted by traditional approaches: tighter money reduces EMP.

Series:

Working Paper No. 02/14

Subject:

English

Publication Date:

January 1, 2002

ISBN/ISSN:

9781451843132/1018-5941

Stock No:

WPIEA0142002

Format:

Paper

Pages:

54

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