{
  "title": "Unveiling the Effects of Foreign Exchange Intervention: A Panel Approach",
  "publication": "IMF Working Papers, June 23, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/unveiling-the-effects-of-foreign-exchange-intervention-a-panel-approach-43019",
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  "summary": "We study the effect of foreign exchange intervention on the exchange rate relying on an instrumental-variables panel approach. We find robust evidence that intervention affects the level of the exchange rate in an economically meaningful way.",
  "sections": [
    {
      "heading": "Summary of findings",
      "content": "- The paper uses an instrumental-variables panel approach to study the effect of foreign exchange intervention on the exchange rate.\n- Intervention affects the level of the exchange rate in an economically meaningful way.\n- A purchase of foreign currency of 1 percentage point of GDP causes:\n  - a depreciation of the nominal exchange rate in the range of [1.7-2.0] percent.\n  - a depreciation of the real exchange rate in the range of [1.4-1.7] percent.\n- The effects are found to be quite persistent."
    },
    {
      "heading": "Methods and scope",
      "content": "- Empirical approach: instrumental-variables panel estimation.\n- Explored dimensions:\n  - possible asymmetric effects of intervention.\n  - whether effectiveness depends on the depth of domestic financial markets."
    },
    {
      "heading": "Key statistics and publication identifiers",
      "content": "- Pages: 42\n- Volume: 2015\n- Issue: 130\n- Series: Working Paper No. 2015/130\n- DOI: https://doi.org/10.5089/9781513514864.001\n- ISBN: 9781513514864\n- ISSN: 1018-5941"
    },
    {
      "heading": "Policy-relevant implications (as presented)",
      "content": "- Foreign exchange intervention can be an effective tool to influence nominal and real exchange rates in economically meaningful magnitudes when interventions are sizable relative to GDP.\n- Effectiveness and persistence suggest interventions may have longer-lasting impacts, with potential variation depending on market depth and asymmetries (topics explored in the paper).\n\nUnveiling the Effects of Foreign Exchange Intervention: A Panel Approach — Gustavo Adler, Noemie Lisack, Rui Mano, June 23, 2015.\n\n---\n\n Content in this bundle\n\n- 2.1 Approach\n  - 2.1 Approach (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 2.1 Approach (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/unveiling-the-effects-of-foreign-exchange-intervention-a-panel-approach-43019"
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    "Authors: Gustavo Adler, Noemie Lisack, Rui Mano",
    "Published: June 23, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513514864.001",
    "The paper uses an instrumental-variables panel approach to study the effect of foreign exchange intervention on the exchange rate.",
    "Intervention affects the level of the exchange rate in an economically meaningful way.",
    "A purchase of foreign currency of 1 percentage point of GDP causes:",
    "The effects are found to be quite persistent.",
    "Empirical approach: instrumental-variables panel estimation.",
    "Explored dimensions:",
    "Pages: 42",
    "Volume: 2015",
    "Issue: 130",
    "Series: Working Paper No. 2015/130",
    "DOI: https://doi.org/10.5089/9781513514864.001",
    "ISBN: 9781513514864",
    "ISSN: 1018-5941",
    "Foreign exchange intervention can be an effective tool to influence nominal and real exchange rates in economically meaningful magnitudes when interventions are sizable relative to GDP.",
    "Effectiveness and persistence suggest interventions may have longer-lasting impacts, with potential variation depending on market depth and asymmetries (topics explored in the paper).",
    "**2.1 Approach**"
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