Sterilization and currency crisis in emerging economies

In the Asian currency crisis, a large amount of money flowing into Asia increased domestic inflationary pressure, which caused the crisis. In Asian countries, the authorities sterilize the money supply at the same time as the foreign exchange intervention to maintain the dollar peg in response to the inflow of funds, but in emerging countries it is difficult to do it properly.

Bulletin of Aoyama Gakuin University Graduate School of International Politics and Economics