From Fixed to Float: Operational Aspects of Moving towards Exchange Rate Flexibility

Gilda Fernandez, Cem Karacadag and Rupa Duttagupta

No 2004/126, IMF Working Papers from International Monetary Fund

Abstract: This paper identifies the institutional and operational requisites for transitions to floating exchange rate regimes. In particular, it explores key issues underlying the transition, including developing a deep and liquid foreign exchange market, formulating intervention policies consistent with the new regime, establishing an alternative nominal anchor in the context of a new monetary policy framework, and building the capacity of market participants to manage exchange rate risks and of supervisory authorities to regulate and monitor them. It also assesses the factors that influence the pace of exit and the appropriate sequencing of exchange rate flexibility and capital account liberalization.

Keywords: WP; exchange rate regime; floating exchange rate; market participant; crawling peg; stabilization program; Exchange rate policy; foreign exchange markets; intervention; capital account; nominal exchange rate; market illiquidity; delegating exchange control authority; market uncertainty; foreign exchange market activity; market transparency; well-functioning foreign exchange market; market pressure; market activity; market-making role; increase market information; Exchange rate flexibility; Exchange rates; Currency markets; Exchange rate arrangements; Exchange rate risk; Africa; East Asia (search for similar items in EconPapers)
Pages: 39
Date: 2004-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=17536 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2004/126

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().