Sterilized intervention in Latin America’s foreign exchange markets: Brazil, Chile and Mexico
We analyze the relevance of the conventional macroeconomic model supporting the inflation target program and examine its non-viability when interest rate parity is rejected, making it possible to apply sterilized intervention in the foreign exchange marketas a monetary policy instrument. In this stu...
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2011 |
| País: | México |
| Institución: | UNIVERSIDAD NACIONAL AUTÓNOMA DE MÉXICO |
| Repositorio: | Problemas del Desarrollo. Revista Latinoamericana de Economía |
| Idioma: | español |
| OAI Identifier: | oai:ojs.pkp.sfu.ca:article/27752 |
| Acceso en línea: | https://www.probdes.iiec.unam.mx/index.php/pde/article/view/27752 |
| Access Level: | acceso abierto |
| Palabra clave: | Sterilized intervention exchange rate monetary policy exchange rate discovery through interest rates fear of floating Intervención esterilizada tipo de cambio política monetaria paridad descubierta de tasas de interés miedo a flotar |
| Sumario: | We analyze the relevance of the conventional macroeconomic model supporting the inflation target program and examine its non-viability when interest rate parity is rejected, making it possible to apply sterilized intervention in the foreign exchange marketas a monetary policy instrument. In this study, we want to use econometric methods to evaluate whether three Latin American countries (Brazil, Chile and Mexico) –which referto themselves as having floating currencies, as their central banks adopt inflation target programs, and where a magnified pass-through effect is observed from the exchangerate to inflation –effectively use sterilized intervention in the foreign exchange market to regulate their exchange rates |
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