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| Tekijä: | Basurto, G. Ghosh, A. |
| Otsikko: | The interest rate - exchange rate nexus in currency crises |
| Lehti: | IMF Staff papers
2001 : VOL. 47, special issue, p. 99-120 |
| Asiasana: | Interest rates Exchange rates Currency markets |
| Kieli: | eng |
| Tiivistelmä: | Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thailand) raised doubts about the efficacy of increasing interest rates to defend the currency. Using a standard monetary model of exchange rate determination, this paper shows that tigher monetary policy was in fact associated with an appreciation of the exchange rate in these countries and during the Mexican currency crisis. There is little evidence of higher real interest rates contributing to a widening of the risk premium. |
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