Occasional Papers

Official Foreign Exchange Intervention

Author/Editor:

Jorge I Canales Kriljenko ; Cem Karacadag ; Roberto Guimarães-Filho ; Shogo Ishii

Publication Date:

March 2, 2006

Electronic Access:

Link to Abstract

Summary:

Despite increasing exchange rate flexibility, central banks in emerging markets still intervene in their foreign exchange markets for several reasons. In doing so, they face many operational questions, including on the degree of transparency and the choice of markets and counterparties. This paper identifies elements of best practice in official foreign exchange intervention, presents survey evidence on intervention practices in developing countries, and assesses the effectiveness of intervention in Mexico and Turkey.

Series:

Occasional Paper No. 2006/001

Subject:

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