A monetary analysis of foreign exchange market disequilibrium in Fiji
AbstractThis paper evaluates a monetary model of foreign exchange market pressure in Fiji using the autoregressive distributed lag bounds testing methodology. The results suggest that if the monetary authorities in Fiji fix the exchange rate, they lose the ability to implement an independent monetary policy through control of central bank credit. Stronger monetary control is regained to the extent that pressure in the foreign exchange market is relieved through exchange rate movements rather than reserve movements.
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Bibliographic InfoArticle provided by Inderscience Enterprises Ltd in its journal Int. J. of Economic Policy in Emerging Economies.
Volume (Year): 5 (2012)
Issue (Month): 1 ()
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Web page: http://www.inderscience.com/browse/index.php?journalID=219
EMP; exchange market pressure; Fiji; monetary policy; ARDL; autoregressive distributed lag; error correction; bounds testing; exchange market disequilibrium; foreign exchange markets; exchange rates; central bank credit.;
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