The Yen-Dollar Rate: Have Interventions Mattered?

June 1, 2000

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Format: Chicago

Ramana Ramaswamy, and Hossein Samiei. The Yen-Dollar Rate: Have Interventions Mattered?, (USA: International Monetary Fund, 2000) accessed September 19, 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

Using daily data for 1995–99, this paper estimates a simple forward looking model of the exchange rate to show that foreign exchange interventions have, on the whole, had small but persistent effects on the yen-dollar rate. Contrary to conventional wisdom, sterilized interventions have mattered. Consistent with conventional wisdom, coordinated interventions have a higher probability of success and move the yen-dollar rate by a larger margin than unilateral interventions. A probit model indicates that both an excessive appreciation and depreciation of the yen provoke interventions, and that interventions occur in clusters—if there is one today, there will likely be another tomorrow.

Subject: Currencies, Currency markets, Exchange rate adjustments, Exchange rates, Financial markets, Foreign exchange, Foreign exchange intervention, Money

Keywords: Currencies, Currency markets, Exchange rate adjustments, Exchange rates, Expectations, Foreign exchange intervention, Global, Intervention dummy, Interventions, Sterilized intervention, WP, Yen appreciation, Yen depreciation, Yen-dollar market, Yen-dollar rate

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2000/095
Stock No:

WPIEA0952000
ISBN:

9781451851816
ISSN:

1018-5941

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