Economic and financial integration has reshaped the monetary policy frameworks and transmission channels in the emerging market economies (EMEs) over the past two decades. Economic and financial linkages have become stronger, resulting in greater synchronization of business cycles across...

A central bank may decide to conduct foreign exchange interventions when it concludes that the exchange rate level without such interventions would be insufficiently strong. A by-product of such interventions will then be a build-up of official foreign exchange (FX) reserves. A case in point is...