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

Author/Editor:

Jorge I Canales Kriljenko

Publication Date:

May 1, 2003

Electronic Access:

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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.

Series:

Working Paper No. 2003/095

Subject:

Banking Currency markets Exchange rate arrangements Exchange rates Financial markets Foreign exchange Foreign exchange intervention

English

Publication Date:

May 1, 2003

ISBN/ISSN:

9781451851847/1018-5941

Stock No:

WPIEA0952003

Pages:

59

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