This paper studies the impact effect of monetary policy shocks - identified by the reaction of three month market interest rates to policy announcements - on the exchange rate in Australia, Canada, and New Zealand during the 1990s. The main results are that (i) on average, a 100 basis point...

This paper studies the impact effect of monetary policy shocks—identified by the reaction of three month market interest rates to policy announcements—on the exchange rate in Australia, Canada, and New Zealand during the 1990s. The main results are that (1) on average, a 100 basis point...

In a floor system of monetary policy implementation, the central bank remunerates bank reserves at or near the market rate of interest. Some observers have expressed concern that operating such a system will have adverse fiscal consequences for the public sector and may even require the...