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Rojas-Suárez, Liliana.

Financial Market Integration and Exchange Rate Policy Liliana Rojas-Suárez. [electronic resource] / Liliana Rojas-Suárez. - Washington, D.C. : International Monetary Fund, 1990. - 1 online resource (66 p.) - IMF Working Papers; Working Paper ; No. 90/2 . - IMF Working Papers; Working Paper ; No. 90/2 .

This paper examines how a country's exchange rate policy should be adjusted when the degree of integration between domestic and external financial markets increases as a result of both domestic financial liberalization and the relaxation of capital controls. As the financial structure is opened and liberalized, the optimal scale of exchange market intervention changes as the relative importance of different domestic and foreign shocks for output and price stability is altered. Nonetheless, the response of the optimal degree of intervention to increases in the variances of the various domestic and foreign shocks is similar across all financial structures.

ISBN: 1451930976 : 15.00 USD

ISSN: 1018-5941

Standard No.: 10.5089/9781451930979.001 doi

Subjects--Topical Terms:
Deposit Rate
Exchange Market Intervention
Exchange Rate
Financial Markets

Subjects--Geographic Terms:
United States