We formulate a mathematical model for the optimal control of the exchange rate. The control consists of a stochastic control, and an impulse control. We give general sufficient conditions for its solution. We consider a government that has two means of avoiding the foreign exchange rate...

This paper empirically examines the effect of the central banks independence on exchange rate volatility by using a large data-set for the E7 (7 emerging countries) covering the period 1998-2017. This paper applies the time-varying panel causality analysis to obtain country-based results. The...