Motives and Effectiveness of Forex Interventions: Evidence from Peru
Electronic Access:
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Summary:
This paper assesses empirically the motives and effectiveness of forex interventions in Peru. While the central bank of Peru states that its forex interventions aim only at containing excessive exchange rate volatility, the results of this paper show that, in practice, the interventions seem to have aimed at “leaning against the wind” as well. The results also show that forex sales, but not forex purchases, react to volatility, indicating asymmetry in the central bank’s reactions to episodes of appreciation and depreciation pressures. Similarly, the paper documents evidence of asymmetry in the effectiveness of forex interventions.
Series:
Working Paper No. 2014/217
Subject:
Balance of payments Capital flows Currency markets Depreciation Exchange rates Financial markets Foreign exchange National accounts
English
Publication Date:
December 12, 2014
ISBN/ISSN:
9781484340189/1018-5941
Stock No:
WPIEA2014217
Pages:
31
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