Arbeitspapier

The Mechanics of a successful Exchange-Rate Peg: Lessons from Emerging Markets

To the surprise of many market watchers, Thailand's exchange-rate peg to the dollar collapsed in July 1997, leading to similar rounds of currency devaluations in other East Asian countries. This study seeks to determine if there were identifiable contrasts in implementation between Thailand's peg and a perennially successful peg. Austria's peg to the Deutsche mark.that would have hinted at problems for Thailand prior to July 1997. The comparison suggests that Thailand was not sufficiently vigilant about keeping its inflation rate low in the early 1990s. By 1995, Thailand faced a situation where a tight monetary policy involving high domestic interest rates would not always have created disinflationary pressure, as high interest rates also tended to attract greater capital inflow to Thailand. In this environment, Thailand's monetary policy became erratic and failed to maintain the exchange-rate peg.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 01.02

Classification
Wirtschaft
Subject
Wechselkurspolitik
Wechselkurssystem
Inflationssteuerung
Österreich
Thailand

Event
Geistige Schöpfung
(who)
Dueker, Michael
Fischer, Andreas
Event
Veröffentlichung
(who)
Swiss National Bank, Study Center Gerzensee
(where)
Gerzensee
(when)
2001

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dueker, Michael
  • Fischer, Andreas
  • Swiss National Bank, Study Center Gerzensee

Time of origin

  • 2001

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