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Effectiveness of High Interest Rate Policy on Exchange Rates: A Reexamination of the Asian Financial Crisis

Brailsford, Timothy John; Penm, Jack HW; Lai, Chin Diew

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One of the most controversial issues in the aftermath of the Asian financial crisis has been the appropriate response of monetary policy to a sharp decline in the value of some currencies. In this paper, we empirically examine the effects on Asian exchange rates of sharply higher interest rates during the Asian financial crisis. Taking account of the currency contagion effect, our results indicate that sharply higher interest rates helped to support the exchange rates of South Korea, the...[Show more]

dc.contributor.authorBrailsford, Timothy John
dc.contributor.authorPenm, Jack HW
dc.contributor.authorLai, Chin Diew
dc.date.accessioned2015-12-07T22:23:29Z
dc.identifier.issn1173-9126
dc.identifier.urihttp://hdl.handle.net/1885/20716
dc.description.abstractOne of the most controversial issues in the aftermath of the Asian financial crisis has been the appropriate response of monetary policy to a sharp decline in the value of some currencies. In this paper, we empirically examine the effects on Asian exchange rates of sharply higher interest rates during the Asian financial crisis. Taking account of the currency contagion effect, our results indicate that sharply higher interest rates helped to support the exchange rates of South Korea, the Philippines, and Thailand. For Malaysia, no significant causal relation is found from the rate of interest to exchange rates, as the authorities in Malaysia did not actively adopt a high interest rate policy to defend the currency.
dc.publisherHindawi Publishing Corporation
dc.sourceJournal of Applied Mathematics and Decision Sciences
dc.titleEffectiveness of High Interest Rate Policy on Exchange Rates: A Reexamination of the Asian Financial Crisis
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume8
dc.date.issued2006
local.identifier.absfor150201 - Finance
local.identifier.ariespublicationu8902633xPUB13
local.type.statusPublished Version
local.contributor.affiliationBrailsford, Timothy John, University of Queensland
local.contributor.affiliationPenm, Jack HW, College of Business and Economics, ANU
local.contributor.affiliationLai, Chin Diew, Massey University
local.description.embargo2037-12-31
local.bibliographicCitation.issue4
local.bibliographicCitation.startpage1
local.bibliographicCitation.lastpage9
local.identifier.doi10.1155/JAMDS/2006/35752
dc.date.updated2015-12-07T09:17:37Z
local.identifier.scopusID2-s2.0-33749514411
CollectionsANU Research Publications

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