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in Table 2 ). In addition, we tested for robustness of our results against initial conditions in the external sector (column 4 in Table 2 ). Central banks’ balance sheet management policies appear to have a significant impact in containing the appreciation of the REER . We find this result holds regardless of whether a country has recently experienced a natural resource discovery or otherwise (columns 2–6 in Table 3 ). However, we find a significantly larger effect of central bank policies in resource rich countries. (column 2–4 in Table 3 ). Robustness