The impact of monetary policy on the exchange rate: puzzling evidence from three emerging economies by Emanuel Kohlscheen published by Banco Central do Brasil. “This study investigates the impact effect of monetary policy shocks on the exchange rates of Brazil, Mexico and Chile. We find that even a focus on 1 day exchange rate changes following policy events – which reduces the potential for reverse causality considerably – fails to lend support for the conventional view that associates interest rate hikes with appreciations.”
