scholarly journals SINGAPORE'S EXCHANGE RATE POLICY: SOME IMPLEMENTATION ISSUES

2007 ◽  
Vol 52 (03) ◽  
pp. 445-458 ◽  
Author(s):  
HWEE-KWAN CHOW
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Policy Instrument ◽  
Exchange Rate Policy ◽  
Policy Framework ◽  
Successful Operation ◽  
Foreign Exchange Intervention ◽  
Rate Policy ◽  
The Exchange Rate

Reflecting the small open nature of its economy, Singapore has adopted an exchange rate-centered monetary policy framework since 1981. The exchange rate regime in Singapore is an intermediate regime that follows the basket-band-crawl system. With this managed float system, the MAS has successfully deterred speculators from attacking the domestic currency for most of the past three decades. At the same time, the flexibility accorded by the managed float system aided Singapore in escaping from the 1997–1998 Asian crisis relatively unscathed. In order to advance our understanding of the hitherto successful operation of Singapore's exchange rate policy, we examine the following three aspects of its implementation: (i) the use of the exchange rate instead of the interest rate as the key monetary policy instrument; (ii) the management of the currency basket in terms of foreign exchange intervention operations; and (iii) regulating the level of domestic liquidity alongside exchange rate policy. This paper also provides some insights on the challenges ahead that potentially face policymakers when implementing Singapore's exchange rate policy.

scholarly journals Notes on the Brazilian Crisis of 1997-99

2003 ◽  
Vol 23 (3) ◽  
pp. 376-404
Author(s):  
FRANCISCO L. LOPES
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Capital Controls ◽  
Critical Issue ◽  
Exchange Rate Policy ◽  
The Real ◽  
Diagonal Band ◽  
Rate Policy ◽  
The Exchange Rate

ABSTRACT This paper deals with the Brazilian crisis of 1997-98 that lead to the exchange rate floating of January 1999. It starts by showing how exchange rate policy evolved since the Real Plan of 1994 and how the exchange rate regime became a critical issue when the crisis started in 1997. It discusses monetary policy during the crisis, the IMF program, the endogenous diagonal band and the decision to float as an alternative to capital controls and default. This five-year drama ended surprisingly well with a benign float, but it is useful to know its details, with the usual mix of economic de- bate, personality clashes and historical fatality.

On the Exchange Rate Policy

2010 ◽  
pp. 21-28
Author(s):  
K. Yudaeva
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Exchange Rate Policy ◽  
Institutional Changes ◽  
Crisis Period ◽  
Local Currency ◽  
High Inflation ◽  
Rate Policy ◽  
The Exchange Rate

The level of trust in the local currency in Russia is very low largely because of relatively high inflation. As a result, Bank of Russia during crisis times can not afford monetary policy loosening and has to fight devaluation expectations. To change the situation in the post-crisis period Russia needs to live through a continuous period of low inflation. Modified inflation targeting can help achieve such a result. However, it should be amended with institutional changes, particularly development of hedging instruments.

Monetary and Exchange Rate Policy in Fragile States

2021 ◽  
pp. 367-405
Author(s):  
Christopher Adam ◽  
James Wilson
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Balance Of Power ◽  
Exchange Rate Policy ◽  
Fragile States ◽  
Policy Choices ◽  
Structural Fragility ◽  
Rate Policy ◽  
Proximate Causes

This chapter charts monetary and exchange rate policy aspects of countries’ descent into, and exit from, economic fragility and draws out some key normative policy lessons for fragile countries and their external partners. Choices around exchange rate regime and the conduct of monetary policy in fragile states will rarely be fundamental drivers of deep structural fragility, even though they may present as proximate causes. Nor are they likely to be decisive in driving the recovery from extreme fragility. However, monetary and exchange rate policy choices can and do play an important role in affecting movements into fragility as well as shaping potential exit paths. Moreover, choices in these domains affect the likely distribution of rents, including those generated by policy distortions themselves. In doing so, they alter the balance of power and can decisively shift the points of influence for policy, including by outside agents.

Emerging Markets Central Banks Exchange Rate Policy

2011 ◽  
pp. 21-34 ◽  
Author(s):  
S. Andryushin ◽  
V. Kuznetsova
Keyword(s):  
Exchange Rate ◽  
Emerging Markets ◽  
Exchange Rate Regime ◽  
Central Banks ◽  
Exchange Rate Policy ◽  
Point Of View ◽  
Nominal Exchange Rate ◽  
Safeguard Measures ◽  
Rate Policy ◽  
The Exchange Rate

The article analyzes the emerging markets central banks exchange rate policy, while they choose the exchange rate regime in conditions of financial globalization. The authors present the new IMF exchange rate regimes taxonomy which separates them using historical data about nominal exchange rate developments. They identify some factors which affect the exchange rate regime option from the macroeconomic point of view. The article reviews some national markets safeguard measures from external shocks generated by international capital inflow or outflow.

scholarly journals Monetary policy and exchange rate regime in tourist islands

2020 ◽  
pp. 135481662095949
Author(s):  
Federico Inchausti-Sintes ◽  
Ubay Pérez-Granja
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Exchange Rate Regime ◽  
Dynamic Stochastic General Equilibrium ◽  
Exchange Rate Policy ◽  
Monetary Policies ◽  
Rate Policy ◽  
Dynamic Stochastic ◽  
Travel Industry

The broad impact of the travel industry on economies has been comprehensively analysed in the tourism literature. Despite this, its consequences for monetary policy have remained unaddressed. This article aims at providing a first approach in this line for the case of three small tourist islands such as Cabo Verde, Mauritius and Seychelles. The research is based on a Bayesian estimation using a dynamic stochastic general equilibrium model (DSGE), and the optimal response to a tourism demand shock of four monetary policies is analysed. According to the results, both a conventional peg and an inflation-targeting policies achieve better economic performance. More precisely, the inflation is lower in the former. However, the rise in consumption and the gain in the external competitiveness are sharper in the latter. Finally, the other two policies, an inflation-targeting with managed exchange rate policy and an imported-inflation targeting policies, generate higher consumption and external competitiveness, but, also higher inflation and interest rate.

scholarly journals POST – CRISIS EXCHANGE RATE POLICY IN INDONESIA

2017 ◽  
Vol 2 (2) ◽  
Author(s):  
Abdul Hadi Ilman
Keyword(s):  
Exchange Rate ◽  
Capital Mobility ◽  
Exchange Rate Regime ◽  
Foreign Debt ◽  
International Market ◽  
Flexible Exchange Rate ◽  
Exchange Rate Policy ◽  
Asian Tigers ◽  
Rate Policy ◽  
The Exchange Rate

In 1997 Indonesia was hit by a severe financial crisis which led to the change of almost everything in the country, including the exchange rate regime; from managed floating to free floating or flexible exchange rate. It has been a major conclusion from academic debate that maintaining exchange rate at a certain level or band (soft peg) was no longer workable in the more integrated financial system, international market, and free flow of capital mobility across economy.Indonesia once was known as one of the “Asian Tigers” which were believed to be the next industrialized economies as was being indicated by astounding macroeconomic performance since the early 1990s. The exchange rate management, in which the objective was to have a competitiveness in the international market, was making a huge contribution to that performance. No one suspected those countries would be hit by the crisis until Thailand’s Bath was under attacked and suddenly it spread expeditiously to other economies.Domestically, economy of Indonesia was funded by foreign debt in the several years before crisis to leverage the economy, especially private sector. Thus, when the currency crisis was happening, the value of rupiah was depreciated so much and the central bank could not afford to stabilize the value of rupiah in the market. Then a huge amount of the dollar-denominated short term debt was suspected to default since the debt value in rupiah was becoming very large.

Exchange Rate Regimes and Economic Stability

2010 ◽  
pp. 29-43
Author(s):  
S. Smirnov
Keyword(s):  
Exchange Rate ◽  
Inflation Targeting ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Real Sector ◽  
Economic Stability ◽  
Exogenous Shocks ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
Managed Floating

The Bank of Russia intends to introduce inflation targeting policy and exchange rate free floating regime in three years. Exogenous shocks absorption which stabilizes the real sector of economy is usually considered to be one of the advantages of free floating exchange rate policy. However, our research based on the analysis of 25 world largest economies exchange rates and industrial production during the crisis of 2008-2009 does not confirm this hypothesis. The article also analyzes additional risks associated with free floating exchange rate regime in Russia and presents some arguments in favor of managed floating exchange rate regime.

scholarly journals The choice of an exchange rate regime: Outcomes and constraints

2006 ◽  
Vol 51 (168) ◽  
pp. 73-94 ◽  
Author(s):  
Srdjan Marinkovic
Keyword(s):  
Exchange Rate ◽  
Slow Growth ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Country Study ◽  
Exchange Rate Misalignment ◽  
Rate Policy ◽  
Policy Measures ◽  
Exchange Policy ◽  
The Stability

An inappropriate exchange rate policy is likely to undermine overall efforts to transform the economy. Namely, it is now well accepted either at the theoretical or policy level that situations of real exchange rate misalignment could be translated into important welfare costs. This country study highlights "irrelevancy" of the stability criteria when slow growth recovery threatens to endanger even social roots of determination for reform. We discuss foreign exchange policy and other related policy measures that are likely to align economic and political goals inside a trade-off between stability and growth.

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