Transparency in Central Bank Operations in the Foreign Exchange Market

IMF Policy Discussion Papers, March 1, 1998

Source details

Canonical URL

Transparency in Central Bank Operations in the Foreign Exchange Market

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Authors: Charles Enoch
• Published: March 1, 1998
• Series: IMF Policy Discussion Papers
• DOI: https://doi.org/10.5089/9781451974430.003

Summary

• Transparency in the economic sphere involves making public sector action visible and understandable to the private sector.
• Transparency in central bank operations complements greater transparency being established in policy formulation.
• The paper examines the respective roles of overt and covert foreign exchange market operations and considers that each may be appropriate under particular conditions.
• Reconciling covert operations with transparency requires rules for full disclosure with as short a lag as possible.

Roles of Overt and Covert Foreign Exchange Market Operations

• Overt operations:
  • Presented as transparent interventions in the foreign exchange market.
  • Serve as a complement to transparent policy formulation.
• Covert operations:
  • May be appropriate under particular conditions where discretion is necessary.
  • Present a tension with transparency objectives.

Reconciling Covert Operations with Transparency

• Key recommendation:
  • Establish rules for full disclosure of covert foreign exchange operations with as short a lag as possible.
• Purpose:
  • Make covert actions understandable to the private sector while retaining necessary operational discretion when justified.

Subjects and Keywords (as listed)

• Subjects: Banking, Central bank operations, Central banks, Currency markets, Financial markets, Foreign exchange, Foreign exchange intervention, International reserves
• Keywords: a number of country; authority; central bank; central bank intervention; Central bank operations; country; Currency markets; discretionary market intervention; East Asia; exchange management purpose; foreign exchange; Foreign exchange intervention; foreign exchange market; government transaction; International reserves; management purpose; market; market counterparty; market flow; market fundamentals; market intervention; market participant; market practice; PDP; rate band regime; South Asia; transparency

Content in this bundle

• Tarnsparancy in Central Bank Operations in the Foreign Exchange Market - PPAA/98/2
  • Tarnsparancy in Central Bank Operations in the Foreign Exchange Market - PPAA/98/2 (Markdown version)
  • Tarnsparancy in Central Bank Operations in the Foreign Exchange Market - PPAA/98/2 (PDF)