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dc.contributor.authorChen, Yu-Fu
dc.contributor.authorFunke, Michael
dc.contributor.authorGlanemann, Nicole
dc.description.abstractThis paper provides a modelling framework for evaluating the exchange rate dynamics of a target zone regime with undisclosed bands. We generalize the literature to allow for asymmetric one-sided regimes. Market participants' beliefs concerning an undisclosed band change as they learn more about central bank intervention policy. We apply the model to Hong Kong's one-sided currency board mechanism. In autumn 2003, the Hong Kong dollar appreciated from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities finally revamped the regime as a symmetric two-sided system with a narrow exchange rate band.en_US
dc.publisherUniversity of Dundeeen_US
dc.publisherHamburg Universityen_US
dc.relation.ispartofseriesSIRE DISCUSSION PAPERS;SIRE-DP-2010-38
dc.subjectCurrency Board Arrangementen_US
dc.subjectTarget Zone Modelen_US
dc.subjectHong Kongen_US
dc.titleOff-the-Record Target Zones: Theory with an Application to Hong Kongs Currency Boarden_US
dc.typeWorking Paperen_US

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