Training Catalog Course Details

This course, presented by the Institute for Capacity Development, gives a comprehensive overview of exchange rate analysis and policy. Topics covered include:  

• Key exchange rate concepts (real, nominal, bilateral, multilateral, spot, forward) and arbitrage conditions (UIP, law of one price, PPP, relative PPP); its role in achieving internal and external balance (adjustment to overall equilibrium under floating and fixed exchange rate regimes); its role in economic growth (undervaluation, Washington Consensus, the Balassa-Samuelson effect).  
• Exchange rate policy and regimes (taxonomy, impossible trinity) and associated policy mix (monetary policy independence, financial stability, fiscal policy, capital controls).  
• Practical Problems of Exchange Rate Policy in Developing and Emerging Market Economies (concerns of excessive volatility; de jure vs. de facto regimes; competitiveness, price stability; exchange-rate pass-through; targets and instruments).  
• Transitions from rigid to flexible exchange rates regimes (motives; speed of transition; deep and liquid domestic FX markets, derivatives markets, coherent intervention policy, nominal anchor; transition sequence).   
• FX interventions (sterilized or non-sterilized; motivations, channels, effectiveness, instruments, tactics, policy communication).  
• Currency crisis (causes, role of macroeconomic and prudential policies).  
• Assessing reserve adequacy (ARA).  
• External Balance Assessment (EBA).  
• Early warning system.