HOW SENSITIVE IS VOLATILITY TO EXCHANGE RATE REGIMES? - THE CASE OF CHILE

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

3 Scopus citations

Abstract

In September 1999, the Central Bank of Chile eliminated the floating band for the nominal exchange rate, which operated since 1984, and established a free float. This lasted until the burst of the last Argentinean economic crisis in July 2001. Since then, the Central Bank has smoothed out the exchange rate path by selling U.S. dollars and/or issuing U.S. dollar-denominated bonds. We examine the free float period by assessing whether the increase in exchange rate volatility was as sharp as expected. We show that volatility went up, but only slightly.

Original languageEnglish
Title of host publicationLatin American Financial Markets
Subtitle of host publicationDevelopments in Financial Innovations
EditorsHarvey Arbelaez, Reid William Click
Pages65-97
Number of pages33
DOIs
StatePublished - 2004

Publication series

NameInternational Finance Review
Volume5
ISSN (Print)1569-3767

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