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Exchange Rate Regimes in East Asia by Masahiro Kawai download in iPad, ePub, pdf

And this has considerable relevance of course to those who think that strong appreciation of the real exchange rate can be avoided by pegging to a major currency, or by dollarising. He argues that crawling pegs, by contrast, can be used to maintain a competitive real exchange rate, to the benefit of the country's balance of payments and the country's overall growth rate. The dangers of fixed exchange rate regimes I think we also very largely agree on the pros and cons of fixed exchange rate regimes. However, in contrast to Thailand, the sharp depreciation in our currency produced absolutely no damage to bank balance sheets.

In other words, they see a higher probability of asymmetric shocks occurring. If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. New Zealand currently has both. The banks had hedged all of their foreign currency exposure with most of the exchange rate risk being carried by retail investors in North America, Europe and Japan.

Because financial markets understand this point, this may tend to stabilise the exchange rate that, as in all small open economies, has important direct and indirect effects on the inflation rate. So strong real appreciations appear to be the feature of a variety of currency regimes, both floating and fixed. It is interesting to compare the different decisions on this issue made by, say, Ireland and Canada.

Because financial markets understand this point

On the same basis, sterling appreciated from trough to peak by roughly the same amount at one point in the nineties, and the yen appreciated by very much more than this in the nineties. This allows to link your profile to this item.

So strong real appreciations