We examine the relationship between international reserves variation and the exchange rate and interest rate movements for the past years of the Brazilian economy. The empirical evidence obtained for the international reserves variation captures the distinction between the two exchange rate...

The impact of news surprises on exchange rates depends in principle upon a number of factors including the state of the economy, institutional setting and nature of the expected policy response. These characteristics may lead to state-contingent asymmetric responses to news. In this paper we...