Under the assumption of no arbitrage exchange rate target zone credibility is tested by whether domestic interest rates … absent a devaluation. Under the assumption of uncovered interest rate parity credibility is tested by whether expected future …

outside these rate-of-return bands can be used as a simple test of exchange rate credibility, under the assumption of …

outside these rate-of-return bands can be used as a simple test of exchange rate credibility, under the assumption of …