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Sample Exam Questions - word 2003 File
Sample Exam Questions - word 2003 File

... During the later part of 2005 inflationary pressures resulted in the inflation rate exceeding the inflation target. The Reserve Bank responded by raising the OCR. ...
Here is the Original File - University of New Hampshire
Here is the Original File - University of New Hampshire

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Fear of floating

Fear of floating refers to situations where a country prefers a smoother exchange rate to a floating exchange rate regime. This is more relevant in emerging economies, especially when they suffered from financial crisis in last two decades. In foreign exchange markets of the emerging market economies, there is evidence showing that countries who claim they are floating their currency, are actually reluctant to let the nominal exchange rate fluctuate in response to macroeconomic shocks. In the literature, this is first convincingly documented by Calvo and Reinhart with “fear of floating” as the title of one of their papers in 2000. Since then, this widespread phenomenon of reluctance to adjust exchange rates in emerging markets is usually called “fear of floating”. Most of the studies on “fear of floating” are closely related to literature on costs and benefits of different exchange rate regimes.
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