Does monetary policy react asymmetrically to exchange rate misalignments? Evidence for South Africa

Mateane, Lebogang; Proaño, Christian R.

doi:10.1007/s00181-018-1595-4

Cited by 4 publications

(1 citation statement)

References 43 publications

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“…The price of a country's currency, seen as a commodity, is essentially determined by the relationship between supply and demand in the forex market. The fluctuations of the exchange rate exercise great influence on macroeconomic operation [1] and the implementation of monetary policy [2,3]. From the micro perspective, both enterprises and individuals are more likely to succumb to the risks under a floating exchange rate regime than under a fixed regime since production and consumption behaviors tend to change accordingly when dealing with uncertainty [4].…”

Section: Literature Reviewmentioning

confidence: 99%

Is Foreign Exchange Intervention a Panacea in Diversified Circumstances? The Perspectives of Asymmetric Effects

Wang

Le²,

Park

2020

Sustainability

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Owing to the country’s heavy reliance on exports, the role of foreign exchange intervention in South Korea’s economic development is self-evident. The effectiveness of the intervention is what we are concerned with in this paper. Recently, a growing body of literature has engaged in exploring the asymmetric effects of foreign exchange intervention both theoretically and empirically. Against this background, we employ a threshold vector autoregression (TVAR) model in parallel with its generalized impulse response functions (GIRFs) to show that there are asymmetric effects of the Bank of Korea (BOK)-led interventions regardless of the volatility regimes.

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