... nominal interest rate rules. The main finding of this paperis that the central banks of Australia, New Zealand and the U.K. do not respond to exchange rate movements, whereas the Bank of Canada does. ... to investigate the hypothesis whether central banks do respond to exchange rates. The main result of this paper is that the central banks of Australia, New Zealand and the U.K. do not, whereas ... interest rates and exchange rates. Its usage in the formulationand implementation of monetary policy has been advocated, for instance, by Ball (1999). Thebasic idea is that interest rate and exchange...