The Interest Rate-Exchange Rate Nexus in the Asian Crisis Countries:

Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thailand) raised doubts about the efficacy of increasing interest rates to defend the currency. Using a standard monetary model of exchange rate determination, this paper shows that tighter monetary policy wa...

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Bibliographic Details
Main Author: Ghosh, Atish R. (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C International Monetary Fund 2000
Series:IMF Working Papers Working Paper No. 00/19
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Summary:Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thailand) raised doubts about the efficacy of increasing interest rates to defend the currency. Using a standard monetary model of exchange rate determination, this paper shows that tighter monetary policy was in fact associated with an appreciation of the exchange rate. Moreover, there is little evidence of higher real interest rates contributing to a widening of the risk premium
Physical Description:1 Online-Ressource (25 p)
ISBN:1451843739
9781451843736

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