Exchange rate volatility has emerged as a significant challenge for Asian emerging markets since the adoption of the liberalization process. This study examines the influence of central bank transparency on exchange rate volatility using a sample of ten important Asian emerging markets. The study uses a fixed effect regression model covering the Asian financial crisis, global financial crisis, banking crisis, and taper tantrum episodes. Results show that an increase in central bank transparency has a stabilizing effect on exchange rate volatility, and this effect remains even after controlling for various internal and external factors. The uncertainty of US monetary policy increases exchange rate volatility, while US economic policy uncertainty contributes only during the global financial crisis. Interestingly, central bank transparency buffers the effects of the global financial crisis, indicating that it plays a facilitating role in maintaining financial stability. Studies that examine the role of central bank transparency in curbing exchange rate volatility, which is a crucial issue in these markets, are rare in emerging markets’ context. This research offers interesting findings by using a variety of robustness checks.

中文翻译：

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中央银行的透明度是否会阻止汇率波动？来自亚洲新兴市场的新证据

自实施自由化进程以来，汇率波动已成为亚洲新兴市场面临的重大挑战。本研究使用十个重要的亚洲新兴市场作为样本，检验中央银行透明度对汇率波动的影响。该研究使用固定效应回归模型涵盖亚洲金融危机、全球金融危机、银行业危机和缩减恐慌事件。结果表明，中央银行透明度的提高对汇率波动具有稳定作用，即使在控制了各种内部和外部因素后，这种作用仍然存在。美国货币政策的不确定性增加了汇率波动，而美国经济政策的不确定性仅在全球金融危机期间有所贡献。有趣的是，中央银行的透明度缓冲了全球金融危机的影响，表明它在维护金融稳定方面发挥着促进作用。研究央行透明度在遏制汇率波动方面的作用，这是这些市场的一个关键问题，在新兴市场背景下很少见。这项研究通过使用各种稳健性检查提供了有趣的发现。