Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey

May 1, 2003

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Format: Chicago

Jorge I Canales Kriljenko. Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey, (USA: International Monetary Fund, 2003) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Based on evidence obtained from the IMF's 2001 Survey on Foreign Exchange Market Organization, the author argues that, for several reasons, some central banks in developing and transition economies may be able to conduct foreign exchange intervention more effectively than the central banks of developed countries issuing the major international currencies. First, these central banks do not always fully sterilize their foreign exchange interventions. In addition, they issue regulations and conduct their foreign exchange operations in a way that increases the central bank's information advantage and the size of their foreign exchange intervention relative to foreign exchange market turnover. Some of the central banks also use moral suasion to support their foreign exchange interventions.

Subject: Banking, Currency markets, Exchange rate arrangements, Exchange rates, Financial markets, Foreign exchange, Foreign exchange intervention

Keywords: Central bank, Central bank intervention, Currency markets, Eastern Europe, Economy, Exchange rate arrangements, Exchange rate volatility, Exchange rates, Foreign exchange intervention, Foreign exchange market microstructure, Foreign exchange market turnover, Foreign exchange net open positions, Foreign exchange position, Foreign exchange regulation, Information advantage, Intervention operation, Intramarginal foreign exchange intervention, Operating practice, Transition economy, WP

Publication Details

Pages:

59
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/095
Stock No:

WPIEA0952003
ISBN:

9781451851847
ISSN:

1018-5941

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