Long swing in appreciation and short swing in depreciation and does the market not know it?—the case of Taiwan

Chung-Hua Shen and Shyh-Wei Chen

International Economic Journal, 2004, vol. 18, issue 2, 195-213

Abstract: This paper finds an asymmetric swing in Taiwan's exchange rate. In contrast to the developed countries, whose exchange rates exhibit long swings in both appreciation and depreciation regimes, the long swing only exists in an appreciation regime for Taiwan. A short swing, however, is found during a depreciation regime in Taiwan. These results may reflect to some extent the central bank's preference, which is to have a let-it-go policy during depreciation and a slowdown policy in appreciation. In addition, it may simply reflect the Japanese yen's influences.

Keywords: Long swing; uncovered interest parity; central bank preference (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (7)

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DOI: 10.1080/1016873042000228330

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