Foreign exchange market pressure and capital controls

Gilal Muhammad Akram, Joseph Paul Byrne

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)
863 Downloads (Pure)


This novel empirical study contributes to the literature on the foreign exchange market and financial liberalisation. We examine the determinants of Exchange Market Pressure (EMP) in a panel of forty countries, using a statistical approach to measure market pressure, with particular focus upon the impact of capital controls. We also consider whether EMP is related to a range of other macroeconomic indicators, policy variables and trade openness. We find that capital controls are associated with weaker currencies, especially for advanced countries. Our results are robust to potential endogeneity and different measures of exchange market pressure.
Original languageEnglish
Pages (from-to)42-53
Number of pages12
JournalJournal of International Financial Markets, Institutions and Money
Early online date15 Apr 2015
Publication statusPublished - Jul 2015


  • Exchange market pressure
  • Capital controls
  • Monetary policy


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