The Interest Rate-Exchange Rate Nexus in the Asian Crisis Countries
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 tighter monetary policy wa...
Main Author: | |
---|---|
Other Authors: | |
Format: | eBook |
Language: | English |
Published: |
Washington, D.C.
International Monetary Fund
2000
|
Series: | IMF Working Papers
|
Subjects: | |
Online Access: | |
Collection: | International Monetary Fund - Collection details see MPG.ReNa |
Summary: | 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 tighter monetary policy was in fact associated with an appreciation of the exchange rate. Moreover, there is little evidence of higher real interest rates contributing to a widening of the risk premium |
---|---|
Physical Description: | 25 pages |
ISBN: | 9781451843736 |