Risk appetite and foreign exchange intervention in an inflation-targeting framework: the case of Indonesia

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dc.contributor.authorLubis, Alexander
dc.contributor.authorAlexiou, Constantinos
dc.contributor.authorNellis, Joseph G.
dc.date.accessioned2023-05-19T15:12:33Z
dc.date.available2023-05-19T15:12:33Z
dc.date.issued2023-03-31
dc.description.abstractThe use of foreign exchange intervention in an inflation-targeting framework raises the question regarding its role. In addition, in an environment of volatile capital flows, how the risk appetite of foreign investors might impact the economy is worth exploring. This paper examines these issues for Indonesia by developing and estimating a dynamic stochastic general equilibrium model. This study finds that the foreign exchange intervention affects the macroeconomic variables through the portfolio channel. The risk appetite also affects the economy by increasing the price of capital. The foreign exchange intervention helps in stabilizing the economy during the presence of risk appetite shocks and monetary policy shocks.en_UK
dc.identifier.citationLubis A, Alexiou C, Nellis JG. (2023) Risk appetite and foreign exchange intervention in an inflation-targeting framework: the case of Indonesia, Bulletin of Monetary Economics and Banking. Volume 26, Issue 1, March 2023, Article number 8en_UK
dc.identifier.issn1410-8046
dc.identifier.urihttps://doi.org/10.59091/1410-8046.2044
dc.identifier.urihttps://dspace.lib.cranfield.ac.uk/handle/1826/19678
dc.language.isoenen_UK
dc.publisherBank of Indonesiaen_UK
dc.rightsAttribution-NonCommercial 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc/4.0/*
dc.subjectmonetary policyen_UK
dc.subjectforeign exchange interventionen_UK
dc.subjectDSGEen_UK
dc.titleRisk appetite and foreign exchange intervention in an inflation-targeting framework: the case of Indonesiaen_UK
dc.typeArticleen_UK

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