Regional How Powerful is Unannounced, Sterilized Foreign Exchange Intervention?

Alain Naef and Jacob Weber ()

Working papers from Banque de France

Abstract: Though most central banks actively intervene on the foreign exchange market, the literature offers mixed evidence on their effectiveness: particularly for unannounced interventions. We use new, declassified data from the archives of the Bank of England and the institutional features of the Bretton Woods era to estimate the effects of intervention on the exchange rate. We find that a purchase of pounds equivalent to 1% of the money supply causes a statistically significant, 4-5 basis point appreciation in the pound.

Keywords: Monetary Policy; Foreign Exchange Markets; Bretton Woods System (search for similar items in EconPapers)
JEL-codes: F3 N2 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2021
New Economics Papers: this item is included in nep-ban, nep-his and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:834

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