## 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](https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/transparency-in-central-bank-operations-in-the-foreign-exchange-market-2539)

## Other formats

- [Markdown version](/en/publications/imf-policy-discussion-papers/issues/2016/12/30/transparency-in-central-bank-operations-in-the-foreign-exchange-market-2539/index.md)
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## Bibliographic details
- Authors: Charles Enoch
- Published: March 1, 1998
- Series: IMF Policy Discussion Papers
- DOI: https://doi.org/10.5089/9781451974430.003

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### 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

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## Content in this bundle

- **Tarnsparancy in Central Bank Operations in the Foreign Exchange Market - PPAA/98/2**
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_Source: https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/transparency-in-central-bank-operations-in-the-foreign-exchange-market-2539_