The international monetary system and exchange rate policies in the developing countries (english) abstract the paper reviews the proximate objectives the exchange rate regimes of developing countries may serve. Exchange rate is one of the central factors that influence the monetary policies in developing countries a country can choose to make use of a fixed exchange rate (single or multi-currency peg), intermediate regime like (adjustable or crawling peg) or adopt a flexible exchange rate depending upon the supply rate of money and her monetary self-sufficiency. With high levels of protection for domestic industry, and with exchange rates that were often maintained at unrealistic levels (usually in an effort to make imported capital goods “cheap”), the experience of most developing countries was that export earnings grew relatively slowly the simultaneously sharp increase in demand for imported . This chapter discusses the exchange rate policies for developing countries developing countries have generally favored adjustable par values as the basis for the world exchange rate system this . Exchange rate policies for developing countries, economic how important is sound domestic macroeconomics in attracting capital inflows to developing countries.
A fixed exchange rate is when a country ties the value of its currency to some other widely-used commodity or currency the dollar is used for most transactions in international trade today, most fixed exchange rates are pegged to the us dollar countries also fix their currencies to that . Exchange-rate policy for developing countries by roberto chang and andre´s velasco according to the imf, in the mid-1970’s approximately 85 percent of developing coun-tries had pegged exchange-rate arrangements. Exchange rate depreciation, to give a boost to exports structural policies include: liberalising trade by removing barriers which protect domestic firms, to enable countries to discover their true comparative advantage, and specialise in producing goods and services with the lowest opportunity cost .
Policy makers more flexibility with regard to crucial monetary and exchange rate policies cepr capital controls and monetary policy in developing countries 5 introduction. Exchange rate policies for developing countries 651 there is no domestic bond market and no internationally traded finan- cial asset stock disequilibria in the domestic money market are cleared. Capital account policies, imf programs and growth in exchange rate and monetary autonomy empirical literature on the capital account policies and growth in .
In spite of the attention paid exchange rates in recent economic debates on developing countries, relatively few studies have systematically analyzed in detail the various ramifications of exchange rate policy in these countries. Parallel exchange rates in developing countries (english) abstract dual exchange rates and black markets for foreign exchange are common in developing countries, and a body of evidence is beginning to emerge on the effects that such parallel foreign exchange systems have on macroeconomic performance. Exchange rate policy in developing countries: some analytical issues, by bijan b aghevli, mohsin s khan, and peter j montiel 1991 77 determinants and systemic consequences of international capital flows: a study by the research department of the international monetary fund 1991. The exchange rate is a crucial variable linking a nation’s domestic economy to the international market thus choice of an exchange rate regime is a central component in the economic policy of developing countries and a key factor affecting economic growth. Real exchange rates, devaluation, and adjustment provides a unified theoretical and empirical investigation of exchange rate policy and performance in scores of developing countries.
Pegged exchange rates: the pros and cons us dollar exchange rate there is a price that governments pay when implementing the pegged-currency policy in their countries. Exchange rate policies for developing countries: apparently no intermediate exchange rate regime suitable for developing countries should monetary policy . The relationship between exchange rate regime and monetary policy independence has been tested in a few papers for a large sample of industrial and developing countries,. The paper studies empirically fiscal policies around elections in 25 developing countries as affected by the exchange rate regime the purpose is to consider whether countries with flexible exchange regimes are less likely to engage in expansionary fiscal policies before elections because such policies can result in devaluations and inflation which affect government popularity adversely.
Dual and multiple exchange rate systems in developing countries : some empirical evidence (english) abstract the authors examine the determinants of the parallel exchange rate for a cross-country sample of developing countries. Exchange rate policy and sovereign bond spreads in developing countries samir jahjah, bin wei, vivian zhanwei yuey june 2012 abstract this paper empirically analyzes how exchange rate policy a⁄ects the issuance and pricing. Exchange rate policy, in developing countries w max corden in general the best approach to exchange rate policy is the real targets approach, although the nominal .