Long Swing in Appreciation and Short Swing in Depreciation and does the Market not Know It?-the Case of Taiwan

다국어 초록 (Multilingual Abstract)

This paper finds an asymmetric swing in Taiwan exchange rate. In contrast to the
developed countries, whose exchange rates exhibit long swings in both appreciation and
depreciation regimes, the long swing only exists in an appreciation regime for Taiwan. A
short swing, however, is found during a depreciation regime in Taiwan. These results may
reflect to some extent the central bank’s preference, which is to have a let-it-go policy during
depreciation and a slowdown policy in appreciation. Also, it may simply reflect the Japanese
yen’s influences.

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