MANAGING FLEXIBILITY: JAPANESE EXCHANGE RATE POLICY, 1971–2007

2007 ◽  
Vol 52 (03) ◽  
pp. 335-361 ◽  
Author(s):  
SHINJI TAKAGI
Keyword(s):  
Exchange Rate ◽  
Capital Controls ◽  
Exchange Rate Policy ◽  
Foreign Exchange Intervention ◽  
Bretton Woods ◽  
Capital Account Convertibility ◽  
Rate Policy ◽  
Account Convertibility ◽  
Leaning Against The Wind

The paper reviews Japan's exchange rate policy from the end of the Bretton Woods era to the present. The Japanese authorities used various tools to manage the yen–dollar exchange rate over much of this period. The most dominant was official foreign exchange intervention, which in most instances took the form of "leaning against the wind". Capital controls were also used but, with full capital account convertibility, ceased to exist as an instrument of exchange rate policy by the mid-1980s. Following the post-Plaza appreciation of the yen, the authorities eased monetary policy to arrest the appreciating pressure. The possible role of exchange rate policy in the great asset inflation that followed, however, remains unanswered. More recently, exchange rate policy during the period of prolonged stagnation and fragile recovery was made subordinate to the overall stance of macroeconomic policy. In this regard, particularly striking in terms of scale and frequency was the "great intervention" of 2003–2004. Equally striking has been the total absence of official intervention since. It would require a renewed substantial volatility of the yen to know whether this indeed marks a permanent shift in Japan's exchange rate policy.

The Evolution of Exchange Rate Policy and Capital Controls in Australia

2006 ◽  
Vol 5 (2) ◽  
pp. 7-29 ◽  
Author(s):  
Guy Debelle ◽  
Michael Plumb
Keyword(s):  
Exchange Rate ◽  
Extended Period ◽  
Capital Controls ◽  
Flexible Exchange Rate ◽  
Exchange Rate Policy ◽  
Reform Process ◽  
Bretton Woods ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
External Forces

After the end of the Bretton Woods system in the early 1970s, exchange rate policy in Australia moved through several regimes over an extended period. The overarching theme was to increase flexibility and efficiency in the Australian currency market and the financial system more generally. This paper documents Australia's gradual move from a fixed to a floating exchange rate and the abolition of capital controls, with an emphasis on the thinking behind various reforms and the practical difficulties encountered during the reform process. Policy reform was often in response to external forces exposing deficiencies in the prevailing system, rather than through a carefully planned path to greater flexibility. Ultimately, a combination of domestic and international factors rendered the move to a flexible exchange rate largely inevitable.

scholarly journals Capital Controls or Real Exchange Rate Policy? A Pecuniary Externality Perspective

2013 ◽  
Author(s):  
Gianluca Benigno ◽  
Huigang Chen ◽  
Alessandro Rebucci ◽  
Christopher Otrok ◽  
Eric Young
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Capital Controls ◽  
Exchange Rate Policy ◽  
Pecuniary Externality ◽  
Rate Policy

Statement by the Managing Director on the Independent Evaluation Office Report on IMF Exchange Rate Policy Advice

Policy Papers ◽  
2017 ◽  
Vol 2017 (57) ◽  
Author(s):  
Keyword(s):  
Exchange Rate ◽  
Policy Advice ◽  
Exchange Rate Policy ◽  
Independent Evaluation ◽  
Rate Policy ◽  
External Sector ◽  
The Imf

I would like to thank the Independent Evaluation Office (IEO) for preparing this informative and timely report, which provides an update on the IMF’s progress in its approach to exchange rate policy advice since 2007. I am pleased with its main finding that the IMF has substantially overhauled its approach to exchange rate policy advice, and concur that some issues need our continued attention. I would like to note that management and staff remain fully committed to the role of the External Sector Report (ESR) in Fund surveillance.

Globale Finanzmärkte, Währungskrisen und aufstrebende Volkswirtschaften

1999 ◽  
Vol 48 (2) ◽  
Author(s):  
Juergen B. Dönges
Keyword(s):  
Economic Policy ◽  
Financial Crises ◽  
Capital Controls ◽  
Banking Regulation ◽  
Exchange Rate Policy ◽  
Costs And Benefits ◽  
International Organisations ◽  
International Financial Crises ◽  
Rate Policy

AbstractRecent international financial crises in emerging markets have impressively made clear that there is still a lack of knowledge about the causes and consequences of financial turmoil. In particular, questions of why crises emerge, how they are transmitted, how they can be predicted and prevented and how they can be managed once they have occurred, are not adequately answered. Both research in economics and economic policy now focus on all aspects of international financial crises. This paper first provides an overview about the state of economic theory explaining financial and monetary crises. The theoretical survey is followed by a discussion of the appropriate economic policy reaction. This discussion includes the role of international organisations, exchange rate policy, costs and benefits of capital controls as well as the need for a prudential banking regulation.

scholarly journals China’s Exchange Rate Policy: Forty Years of Reforms and Prospects

2020 ◽  
Vol 64 (12) ◽  
pp. 33-43
Author(s):  
I. Kudryashova
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Policy ◽  
Economic Relations ◽  
Monetary Authorities ◽  
Key Factor ◽  
Rate Policy ◽  
Product Manufacturing ◽  
Market Factors ◽  
State Interference

After four decades of reforms, China has become one of the biggest economies of the world and its exchange rate policy is a key factor in this process. The paper focuses on the conditions that have shaped the directions of China’s exchange rate policy at every stage of its evolution, the measures taken and the results achieved in terms of the policy’s effect on the economic growth and balance of payments. It is shown that active state interference in the exchange market policy in the early stages resulted in the undervalued yuan exchange rate and also encouraged positive dynamics of internal production due to the enhanced national export competitiveness. In subsequent stages, liberalization of China’s economy, its integration in the global economic relations, its bigger contribution to the global product manufacturing and export led to the increased role of market forces in the yuan exchange rate formation. Some practical measures taken in this direction encouraged the balanced yuan exchange rate, lower surplus of current accounts and increase in balance volatility of capital and financial accounts. Currently, the yuan exchange rate is still controlled. China’s monetary authorities mostly use international reserves to regulate the yuan exchange rate. The paper concludes that it is necessary to further increase the influence of market factors in the yuan exchange rate formation and diversification of the yuan stability instruments in order to maintain export growth rates, to develop China’s financial market and to expand the scope and international spheres of the yuan use.

scholarly journals Exchange Rate Policy and Export Promotion: Evidence from Uzbekistan

2020 ◽  
Vol 5 (5) ◽  
Author(s):  
Elmurod Abdusattorovich Hoshimov
Keyword(s):  
Exchange Rate ◽  
Export Performance ◽  
Export Promotion ◽  
Exchange Rate Policy ◽  
Theory And Practice ◽  
Rate Policy ◽  
The Republic ◽  
The Impact ◽  
Practical Recommendations

This article is devoted to the analysis of the impact of exchange rate policy on export performance in terms of theory and practice. In addition, the article presents developed scientific proposals and practical recommendations aimed at enhancing the promoting role of exchange rate policy in improving export performance of the Republic of Uzbekistan.

Dynamic Dependence between U.S. Inbound Visits and Exchange Rate

2020 ◽  
Vol 44 (6) ◽  
pp. 1035-1046
Author(s):  
Kuang-Liang Chang ◽  
Jui-Chuan Della Chang
Keyword(s):  
Exchange Rate ◽  
Tourism Industry ◽  
Exchange Rate Policy ◽  
Oil Price ◽  
International Tourism ◽  
Tourism Demand ◽  
Positive Dependence ◽  
Rate Policy ◽  
The Exchange Rate

This article revisits the dynamic dependence between the U.S. international tourism demand and the exchange rate using a copula-based specification that features a time-varying and state-switching comovement structure. The empirical results find a state of high-volatile dependence during the oil price upsurge (2005M11-2006M09) and economic/financial crisis (2008M06-2011M06) and a state of low-volatile dependence during the remaining periods. During the former periods, a positive dependence between U.S. inbound visits and currency depreciation is indicated most often, and the magnitude of positive dependence varies dramatically. During the remaining periods, the positive and negative dependences coexist and interchange at a smooth pace. This finding implies that the exchange rate policy affects the tourism industry in the high-volatile dependence state but not in the low-volatile dependence state. The moderating role of crude oil price on the relationship between the international tourism demand and the exchange rate is also verified.

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