PUBLICACIONES

Is the FX Derivatives Market Effective and Efficient in Reducing Currency RIsk?

Cap. Libro y Libros: Is the FX Derivatives Market Effective and Efficient in Reducing Currency RIsk?

JORGE SELAIVE C., ESTEBAN JADRESIC.

2006 - External Vulnerability and Preventive Policies

Abstract

We explore whether the foreign exchange (FX) derivatives market effectively and efficiently reduces the vulnerability to foreign exchange rate fluctuations. Cross-country evidence suggests that development of the FX derivatives market does not boost up spot exchange rate volatility and reduces aggregate exposure to currency risk. Interday and intraday evidence for Chile shows that activity in the forward market has not been associated with higher volatility in the exchange rate following the adoption of a floating exchange rate regime. It also cast doubts about the belief that large participants in the FX market trade based on asymmetric information that may be price relevant. These findings support the view that development of the FX derivatives market is valuable to reduce aggregate currency risk.

Keywords

¿Quieres seguir leyendo? [Accede a la publicación completa]

Sales Summit 2017 - Unegocios FEN UChile

El Centro de Desarrollo Gerencial (Unegocios) del Departamento de Administración la Facultad de Economía y Negocios de la Universidad de Chile realizará el 1er Seminario e...

Ingeniería Comercial de FEN lidera ranking de AméricaEconomía 2017

• La Universidad de Chile se posicionó como la mejor universidad del país según el ranking 2017 de la revista América Economía.  • En el subran...

Todos los Derechos © 2014 | Departamento de Administración - Facultad de Economía y Negocios - Universidad de Chile - Diagonal Paraguay 257, torre 26, oficina 1101, piso 11, Santiago, Chile.