; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Scrambling for Dollars: International Liquidity, Banks and Exchange Rates"; ; "kate.s.hansel@mpls.frb.org"; "Federal Reserve Bank of Minneapolis"; "Monetary policy", "Liquidity premia", "Exchange rates"; "E44 - Financial Markets and the Macroeconomy", "F31 - Foreign Exchange", "F41 - Open Economy Macroeconomics", "G20 - Financial Institutions and Services: General"; "We develop a theory of exchange rate fluctuations arising from financial institutions’ demand for dollar liquid assets. Financial flows are unpredictable and may leave banks “scrambling for dollars.” Because of settlement frictions in interbank markets, a precautionary demand for dollar reserves emerges and gives rise to an endogenous convenience yield on the dollar. We show that an increase in the dollar funding risk leads to a rise in the convenience yield and an appreciation of the dollar, as banks scramble for dollars. We present empirical evidence on the relationship between exchange rate fluctuations for the G10 currencies and the quantity of dollar liquidity, which is consistent with the theory."^^; "2021-11-05"; "2021-11-05T19:15:47.810217634+00:00"^^; "https://doi.org/10.21034/wp.786"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "2023-03-01T16:26:32.883323745+00:00"^^; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "81", "903", "80"; "Working paper (Federal Reserve Bank of Minneapolis. Research Department)"; "786"; "Exchange rates", "Monetary policy", "Liquidity premia"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; ; "Publication" . ; .