Large-scale forex intervention in emerging market economies (EMEs) aimed at resisting currency appreciation has major implications for the composition of banking system balance sheets. The domestic monetary consequences depend on the nature of central bank liabilities that are the counterpart of...

Easy monetary conditions in advanced economies have played an important role in determining domestic monetary conditions in emerging market economies (EMEs), notably through the exchange rate and domestic bond yields. How can EME central banks best react to such external influences? Using a...