Economics at your fingertips  

Capital inflows and the interest premium problem: The effects of monetary sterilisation in selected Asian economies

Tony Cavoli and Ramkishen Rajan ()

International Review of Economics & Finance, 2015, vol. 39, issue C, 1-18

Abstract: Sterilisation of capital inflows remains a pertinent policy option for many Southeast Asian economies. This paper examines some of the possible consequences of complete and incomplete sterilisation by examining its effect on domestic interest rates. We find that there is evidence to suggest that sterilisation influences local rates directly, but the relationship may not be sufficient to preserve interest differentials or to substantially soften the effects of global liquidity transfers into domestic financial market conditions.

Keywords: Monetary Sterilisation; Interest rates; Asia (search for similar items in EconPapers)
JEL-codes: E52 F33 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-10-09
Handle: RePEc:eee:reveco:v:39:y:2015:i:c:p:1-18