Dread of Depreciation: Measuring Real Exchange Rate Interventions
AbstractWe specify an empirical framework to detect the effects of official intervention on real exchange rate dynamics. Using data for 27 advanced and emerging market economies, we find evidence that interventions are a near-universal practice; almost all countries intervene when real exchange rates depreciate; interventions reduce the degree of persistence in real exchange rates; and the defense of an overvalued currency tends to be contractionary.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 02/63.
Date of creation: 01 Apr 2002
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