De jure and de facto exchange rate regimes pdf

Statistical analysis on monthly data for the past decade reveals that in most cases these exchange rate regimes can be approximated surprisingly well by a soft peg to a basket dominated by the us dollar. This article offers a political explanation centered on the need for certain types of government to respond to a broader set of societal actors with different. There exist several statisticallybased exchange rate regime classifications that disagree with one another to a disappointing degree. Use the free adobe acrobat reader to view this pdf file. Exploring different views of exchange rate regime choice. Foremost among these is their essentially backwardlooking nature. Pdf traditionally, the imfs annual report on exchange arrangements and exchange. Rajnish tiwari postcrisis exchange rate regimes in southeast asia 1 1 introduction in recent years there has been a growing trend of countries abandoning their softpeg exchange rate regimes and opting for one of the cornersolutions. The problem was gaps between o cially reported and actually prevailing exchange rate arrangements. Exchange rate regimes meet the berkeleyhaas faculty. This note extends the classification through 2014 and.

In their discussions of papers on exchange rate regimes in september and november 1999, imf executive directors concluded that there were no simple prescriptions for the choice of a countrys exchange rate regime. Bilateral dejure exchange rate regimes and foreign direct. A political explanation for exchangerate regime gaps jstor. Especially, small open economies often dont do what they are saying i. The exchange rate would henceforth be set with reference to a basket of other currencies, with numerical weights unannounced, allowing cumula. A methodological note1 eduardo levyyeyati and federico sturzenegger business school, universidad torcuato di tella minones 2177, 1428. Imf used to classify exchange rate regimes according to of. Based on exchange rate variability levy yayati and sturzennegger 2005.

Exchange rate proclamations and inflationfighting credibility. An exchange rate regime is the way a monetary authority of a country or currency union manages the currency in relation to other currencies and the foreign exchange market. Countries officially declare an exchange rate regimewhether fixed, floating, or somewhere in betweento the international. Tortelboom, jolien, gert elaut, and michael frommel. Evolution and performance of exchange rate regimes. It is closely related to monetary policy and the two are generally dependent on many of the same factors, such as economic scale and openness, inflation rate, elasticity of. Section 3 describes the construction of the new dataset on bilateral dejure exchange rate regimes and outlines our empirical methodology. A specie standard is essentially a fixed exchange rate regime. Also, a fiveyear horizon is used to gauge the true flexibil ity of the longerterm exchange rate regime. Classifying exchange rate regimes harvards growth lab.