Exchange Arrangements and Policies

Anand Chandavarkar

Chapter 4 in Central Banking in Developing Countries, 1996, pp 58-73 from Palgrave Macmillan

Abstract: Abstract The conduct of foreign exchange policy involves six areas of interdependent responsibility: (1) the choice of the exchange rate regime (that is, fixed exchange rate, independent float, managed float); (2) the choice of parities in the regime; (3) specific directives to manage the float; (4) daily decisions on exchange rate interventions; (5) execution of intervention policy; and (6) management of the country’s foreign reserves. Typically, while the execution of intervention decisions and reserves management are vested in the central bank, the other responsibilities are usually divided under four basic patterns (Cottarelli, 1994, pp. 332–3). It is only in a few countries (for example, Sweden, Switzerland and Croatia) that the central bank is responsible for all aspects of foreign exchange policy. The others conform to one. of the following models.

Keywords: Exchange Rate; Central Bank; Foreign Exchange; Exchange Rate Regime; Capital Account (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37150-7_4

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DOI: 10.1057/9780230371507_4

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