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Home arrow Research Projects arrow IP12.2 - Exchange Rate arrow Project Description
Project Description Print

The aim of IP 12.2 is to determine how to broaden the choice of exchange rate policy for developing countries under financial globalisation. In particular, it will seek policy measures for enhancing the viability and credibility of intermediate exchange rate regimes. The efficacy of such policy measures and interventions depends on how well we understand the structures and operations of currency markets, including traders’ behaviour affecting market efficiency and liquidity.

The research will combine analysis of financial crises and the use of econometric methods to analyse the behaviour of exchange rates given the possibility of economic shocks, whether anticipated or not. Such analysis is qualified by the particular constraints which exist in emerging markets with relatively shallow financial markets. This project will conduct an empirical investigation of the structures of foreign exchange markets in emerging market economies across different regimes, using the recently advanced microstructural theory of market volatility.
Focus of individual researchers

  • Machiko Nissanke
    Developing a theoretical model for empirical analysis, linking empirical research to policy debates and providing PhD thesis supervision.

  • Elva Bova
    An analysis of the most suitable exchange rate regime for commodity dependent countries. The study focuses on the transmission mechanisms between world commodity prices and real exchange rates in commodity dependent countries. It aims at assessing which exchange rate regime, combined with a specific degree of privatization in the commodity industry, can prevent and offset the effects of commodity price volatility.

SNF - Swiss National Science Foundation The National Centres of Competence in Research are a research instrument of the Swiss National Science Foundation