The Yen-Dollar Rate: Have Interventions Mattered?
Electronic Access:
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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.
Series:
Working Paper No. 2000/095
Subject:
Currencies Currency markets Exchange rate adjustments Exchange rates Financial markets Foreign exchange Foreign exchange intervention Money
English
Publication Date:
June 1, 2000
ISBN/ISSN:
9781451851816/1018-5941
Stock No:
WPIEA0952000
Pages:
25
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