City Research Online

Abstract

The study examines the impact of Central Bank Transparency (CBT) on foreign exchange market vulnerability, by focusing on exchange market pressure (EMP). Using panel ARDL-based analysis, and a sample of 32 countries, 12 developed markets (DMs), and 20 emerging markets (EMs) over the period 2000-2019, we find that enhanced CBT is associated with a reduction in EMP, which is robust to including US monetary and economic policy uncertainty measures, and financial development. No supporting evidence is found that during times of high uncertainty the impact of CBT on EMP is greater. The flexibility of the exchange rate regime and financial integration are found to support CBT’s reduction of EMP in EMs but not in DMs.

Publication Type:	Article
Additional Information:	This is the peer reviewed version of the following article: Aftab, M. & Phylaktis, K. (2026). Does Central Bank Transparency Curb Foreign Exchange Vulnerability?. Journal of Money, Credit and Banking, which is to be published in final form at https://onlinelibrary.wiley.com/journal/15384616. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Publisher Keywords:	Exchange Market Pressure, Central Bank Transparency, Monetary Uncertainty, Economic Uncertainty, Financial Development, Exchange Rate Regime, Financial Integration
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HG Finance
Departments:	Bayes Business School Bayes Business School > Faculty of Finance
SWORD Depositor:	Symplectic Administrator

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