| 000 -LEADER |
|---|
| fixed length control field |
01680pab a2200205 454500 |
| 008 - FIXED-LENGTH DATA ELEMENTS--GENERAL INFORMATION |
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| fixed length control field |
180718b2001 xxu||||| |||| 00| 0 eng d |
| 100 ## - MAIN ENTRY--PERSONAL NAME |
|---|
| Personal name |
Pattanaik, Sitikantha |
| 245 ## - TITLE STATEMENT |
|---|
| Title |
Interest rate defence of exchange rate: tale of the Indian rupee |
| 260 ## - PUBLICATION, DISTRIBUTION, ETC. |
|---|
| Date of publication, distribution, etc. |
2001 |
| 300 ## - PHYSICAL DESCRIPTION |
|---|
| Extent |
p.4418-428 |
| 362 ## - DATES OF PUBLICATION AND/OR SEQUENTIAL DESIGNATION |
|---|
| Dates of publication and/or sequential designation |
24 Nov |
| 520 ## - SUMMARY, ETC. |
|---|
| Summary, etc. |
While the rationale for raising the interest rate to defend an exchange rate under speculative attack is well grounded in economic and financial theories, empirical validation of the effectiveness of such a policy stance has generally been difficult and is shrouded with conflicting findings. In India, besides forex market interventions and use of several administrative measures, the Reserve Bank of India has occasionally resorted to the high interest rate option during major episodes of significant pressures on the external value of the rupee. An empirical assessment suggests that one standard deviation shock to the call rate leads to rupee appreciation in the very second month. Similarly, for one standard deviation shock to net interventions, the exchange rate appreciates gradually by a few paise over five months. The impulse response also suggests that in response to one standard deviation shock the exchange rate appreciates by about 8 paise in the second month, but subsequently the exchange rate depreciates gradually, more than offsetting the initial impact of the hike in interest rate. - Reproduced |
| 650 ## - SUBJECT ADDED ENTRY--TOPICAL TERM |
|---|
| Topical term or geographic name entry element |
Money - India |
| 650 ## - SUBJECT ADDED ENTRY--TOPICAL TERM |
|---|
| Topical term or geographic name entry element |
Exchange rates - India |
| 650 ## - SUBJECT ADDED ENTRY--TOPICAL TERM |
|---|
| Topical term or geographic name entry element |
Interest rates - India |
| 650 ## - SUBJECT ADDED ENTRY--TOPICAL TERM |
|---|
| Topical term or geographic name entry element |
Interest rates |
| 700 ## - ADDED ENTRY--PERSONAL NAME |
|---|
| Personal name |
Mitra, Arghya Kusum |
| 773 ## - HOST ITEM ENTRY |
|---|
| Main entry heading |
Economic and Political Weekly |
| 909 ## - |
|---|
| -- |
50710 |
