From Fixed to Float : Operational Aspects of Moving towards Exchange Rate Flexibility

Author/Editor:

Gilda C Fernandez ; Cem Karacadag ; Rupa Duttagupta

Publication Date:

July 1, 2004

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 identifies the institutional and operational requisites for transitions to floating exchange rate regimes. In particular, it explores key issues underlying the transition, including developing a deep and liquid foreign exchange market, formulating intervention policies consistent with the new regime, establishing an alternative nominal anchor in the context of a new monetary policy framework, and building the capacity of market participants to manage exchange rate risks and of supervisory authorities to regulate and monitor them. It also assesses the factors that influence the pace of exit and the appropriate sequencing of exchange rate flexibility and capital account liberalization.

Series:

Working Paper No. 04/126

Subject:

English

Publication Date:

July 1, 2004

ISBN/ISSN:

9781451854930/1018-5941

Stock No:

WPIEA1262004

Format:

Paper

Pages:

39

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