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Orderly exits from adjustable pegs and exchange rate bands

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  • Pierre-Richard Agenor

Abstract

This paper examines the exit process from adjustable pegs and exchange rate bands, and the role of capital flows in these exits. It dwells on the experience of various countries, including Chile, Colombia, Egypt, Israel, India, Poland, and Yemen. It begins by identifying conditions under which exits are sought. Next, it discusses the prerequisites for a successful exit, factors affecting the pace of exit, and the nature of the post-exit regime. It then examines the behavior of private capital flows, interest rates, and official reserves before and after three successful exits (Chile, India, and Poland), and draws broad policy lessons.

Suggested Citation

  • Pierre-Richard Agenor, 2004. "Orderly exits from adjustable pegs and exchange rate bands," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(2), pages 83-108.
  • Handle: RePEc:taf:jpolrf:v:7:y:2004:i:2:p:83-108 DOI: 10.1080/1384128002000242388
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    Cited by:

    1. Ahmet Atil Asici & Nadezhda Ivanova & Charles Wyplosz, 2008. "How to exit from fixed exchange rate regimes?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 13(3), pages 219-246.
    2. Enrica Detragiache & Eisuke Okada & Ashoka Mody, 2005. "Exits from Heavily Managed Exchange Rate Regimes," IMF Working Papers 05/39, International Monetary Fund.
    3. Quader, Syed Manzur, 2004. "Floating Exchange Rate Regime," MPRA Paper 26163, University Library of Munich, Germany.
    4. Ahmet Atil Asici, 2010. "Parametric and non-parametric approaches to exits from fixed exchange rate regimes," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 381-406.

    More about this item

    Keywords

    Exchange rate regimes; Monetary policy; Capital flows; JEL codes: F31; F32; E52;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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