IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Exchange Rate Regime Shift in Reaction to a Changing Environment: A Case Study of Kuwait - Modifiche del regime dei tassi di cambio a seguito di modifiche nelle condizioni del sistema: il caso del Kuwait

Listed author(s):
  • Moosa, Imad A.


    (RMIT University School of Economics, Finance and Marketing)

Registered author(s):

    Two propositions are verified about the exchange rate regime of a basket peg, which is adopted by some developing countries. The first is that by pegging the domestic currency to an import-weighted basket, the economy can be insulated from the imported inflation resulting purely from change in exchange rates. The second proposition is that profitable arbitrage can be conducted by going short on the domestic currency and long on the basket (or vice versa) unless the interest rate on the domestic currency is a weighted average of the interest rates on the basket currencies. Several arguments are presented, suggesting that the recent change in the exchange rate regime change of Kuwait from a dollar peg to a basket peg is a step in the right direction. - In questo studio vengono verificate due proposizioni concernenti il regime di cambio ancorato ad un paniere, adottato da alcuni paesi sviluppati. La prima afferma che, agganciando la valuta domestica a un paniere ponderato sulla base delle importazioni, l’economia può essere protetta dall’inflazione che ne conseguirebbe semplicemente modificando i tassi di cambio. La seconda argomenta che si può effettuare un arbitraggio redditizio attraverso vendite allo scoperto di valuta domestica e vendite al rialzo sul paniere (o viceversa), a meno che il tasso di interesse della valuta domestica non sia una media ponderata dei tassi delle valute del paniere. Lo studio formula una serie di argomentazioni che portano a concludere che il recente passaggio adottato in Kuwait da un regime di cambi ancorato al dollaro ad un regime ancorato a un paniere di valute rappresenta un passo nella giusta direzione.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: Full text
    Download Restriction: no

    Article provided by Camera di Commercio Industria Artigianato Agricoltura di Genova in its journal Economia Internazionale / International Economics.

    Volume (Year): 64 (2011)
    Issue (Month): 2 ()
    Pages: 237-255

    in new window

    Handle: RePEc:ris:ecoint:0623
    Contact details of provider: Postal:
    Via Garibaldi 4, 16124 Genova, Italy

    Phone: +39 010 27041
    Fax: +39 010 2704222
    Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Lars Hörngren & Anders Vredin, 1989. "Exchange risk premia in a currency basket system," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(2), pages 311-325, June.
    2. Christoffersen, Peter F & Giorgianni, Lorenzo, 2000. "Interest-Rate Arbitrage in Currency Baskets: Forecasting Weights and Measuring Risk," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(2), pages 242-253, April.
    3. Martin Klein, 1989. "Arbitrage and interest rates on currency baskets," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(2), pages 296-310, June.
    4. Pikkarainen, Pentti, 1991. "International portfolio diversification: the basket-peg regime," Journal of International Money and Finance, Elsevier, vol. 10(3), pages 432-442, September.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ris:ecoint:0623. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angela Procopio)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    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. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.