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From Fixed to Float: Operational Aspects of Moving towards Exchange Rate Flexibility
Author:
Mrs. Gilda C Fernandez
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Mr. Cem Karacadag
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Rupa Duttagupta null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2004: Issue 126
Language:
English
Publication Date:
01 Jul 2004
DOI:
https://doi.org/10.5089/9781451854930.001
ISBN:
9781451854930
ISSN:
1018-5941
Pages:
39
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
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund