Prudential Regulation, Currency Mismatches and Exchange Rate Regimes in Latin America and the Caribbean

Produced by: 
CEMLA
Available from: 
November 2014
Paper author(s): 
Martín Tobal
Topic: 
Macroeconomics - Economic growth - Monetary Policy
Year: 
2015

In this paper, the author reports some of the results from a survey on limits and reserve requirements involving FX positions and the flexibility of their exchange rate regimes. The survey reveals new facts. Countries that have more intensively implemented these measures have taken the bulk of their policies in the transition towards exchange rate flexibility. The author shows that, in flexible regimes, policymakers have higher motivations for implementing FX regulation to achieve exchange rate stability. Yet, policy makers’ concerns differ substantially across countries and implementation characteristics are heterogeneous across policies constraining the same relationship in the balance sheet.

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