Recent theories of exchange rate determination have emphasized limited UIP arbitrage by international financial … institutions. New regulations since 2008 have also lead to imperfect CIP arbitrage. We show that under limited CIP arbitrage the … operate through the swap market, which have no effect under perfect CIP arbitrage. More familiar financial shocks that impact …

phenomena, we develop a two-country model featuring (i) market segmentation, (ii) limited CIP arbitrage (since 2007), (iii …

I provide a novel theory to account for these phenomena and use it to shed light on the data. I break new ground … suspension of convertibility exceeds some agent-specific threshold. The implications of the theory are highlighted in an … analytically tractable example. The theory is then used as a guide to examine and interpret the data, using bi-hourly observations …

controls imposed by the Japanese authority.To that end, new measures of one-way arbitrage gain are defined taking into account …, in Japan. According to our measure, covered interest parity has been holding, as theory predicts, in the Euro market … imposed by the Japanese Government are detected by one-way arbitrage measures between Gensaki in Japan and Euro …