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]

Estudio Adopción y Brechas para Transformación Digital

El Observatorio de Sociedad Digital de la Facultad de Economía y Negocios (FEN) de la Universidad de Chile, presentó el estudio “Adopción & Brechas para Transformaci&...

Observatorio Gestion Personas organiza Seminarion con Profesora Giverny de Boeck

  El Profesor Pedro Leiva, Director del Observatorio de Gestión de Personas del Departamento de Administración y Negocios de la Facultad de Economía y Negocios de la U...

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.