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Exchange rate fluctuations: how has the regime mattered?

Richard Sullivan

This article outlines the major features of New Zealand’s monetary and exchange rate regimes in recent decades. The focus is on how the real exchange rate has been affected by the changing exchange rate regimes. Some simple statistical analysis suggests little difference in the behaviour of the real exchange rate between the fixed and floating exchange rate period and, importantly, the mean, range and variance of the real exchange rate prior to and since inflation targeting are virtually identical.