01796cas a2200253 a 4500 AALejournalIMF007532 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451857375 1018-5941 BD-DhAAL BD-DhAAL Bartolini, Leonardo. Soft Exchange Rate Bands and Speculative Attacks : Theory, and Evidence from the ERM since August 1993 / Leonardo Bartolini, Alessandro Prati. Washington, D.C. : International Monetary Fund, 1998. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We present a model of a 'soft' exchange rate target zone and interpret it as a stylized description of the post-August 1993 ERM. Our central bank targets a moving average of the current and past exchange rates, rather than the exchange rate's current level, thus allowing the rate to move within wide margins in the short run, but within narrow margins in the long run. For realistic parameters, soft target zones are significantly less vulnerable to speculative attacks than 'hard' target zones. These predictions are consistent with the ERM's experience and the abatement of speculative pressure in European markets since the bands' widening in 1993. Mode of access: Internet Prati, Alessandro. IMF Working Papers; Working Paper ; No. 1998/156 Full text available on IMF http://elibrary.imf.org/view/journals/001/1998/156/001.1998.issue-156-en.xml IMF e-Library