Intervention index and exchange rate regimes: the cases of selected East-Asian economies

Abstract

Given the absence of publicly available information on foreign exchange intervention, we propose an index of central bank intervention in the exchange market to classify exchange rate regimes adopted by four East Asian economies. We revisit an old debate on whether these crisis-effected East Asia countries have indeed returned to their pre-1997 rigid exchange rate policies. If, instead, there had been evidences of a policy shift to a more flexible regime, was the move voluntary, or mainly due to high market pressures on the currency? Our findings clearly reject the “hollow middle” hypothesis.Exchange Market Intervention; Exchange Rate Regimes; East Asian Countries