Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey

IMF Working Papers, May 1, 2003

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Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey

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Bibliographic details

• Authors: Jorge I Canales Kriljenko
• Published: May 1, 2003
• Series: IMF Working Papers

Overview and research question

• Based on evidence obtained from the IMF's 2001 Survey on Foreign Exchange Market Organization.
• Author: Jorge I Canales Kriljenko.
• Publication date: May 1, 2003.
• Research question: Whether and why some central banks in developing and transition economies may be able to conduct foreign exchange intervention more effectively than the central banks of developed countries issuing the major international currencies.

Key findings from the survey evidence

• Some central banks in developing and transition economies do not always fully sterilize their foreign exchange interventions.
• Central banks in these economies issue regulations and conduct their foreign exchange operations in a way that:
  • increases the central bank's information advantage; and
  • increases the size of their foreign exchange intervention relative to foreign exchange market turnover.
• Some of the central banks use moral suasion to support their foreign exchange interventions.

Themes and technical terms highlighted

• Banking; Currency markets; Exchange rate arrangements; Exchange rates; Financial markets; Foreign exchange; Foreign exchange intervention.
• Keywords and concepts used in the study: central bank, central bank intervention, Currency markets, Eastern Europe, economy, Exchange rate arrangements, exchange rate volatility, Exchange rates, Foreign exchange intervention, foreign exchange market microstructure, foreign exchange market turnover, foreign exchange net open positions, foreign exchange position, foreign exchange regulation, information advantage, intervention operation, intramarginal foreign exchange intervention, operating practice, transition economy, WP.

Content in this bundle

• Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey - WP/03/95
  • Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey - WP/03/95 (Markdown version)
  • Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey - WP/03/95 (PDF)