Impact of monetary policy on exchange market pressure: The case of Nepal |
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Institution: | 1. School of Economics and Management, Shanghai Maritime University, China;2. Research Center for Economy of Upper Reaches of the Yangtse River, Chongqing Technology and Business University, China |
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Abstract: | This paper uses a monetary model of exchange market pressure to examine the impact of monetary policy on the Nepalese exchange rate. Using a recently developed estimation technique, impulse indicator saturation, along with general-to-specific modeling, we find that a contractionary monetary policy results in easing of pressure on the exchange rate. The robustness of the results is confirmed using misspecification tests. |
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Keywords: | Exchange market pressure Monetary policy Impulse indicator saturation Remittances Nepal |
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