 Peru: Selected Issues PaperInternational Monetary Fund No 2014/022, IMF Staff Country Reports from International Monetary Fund Abstract: This Selected Issues paper assesses empirically the motives and effectiveness of foreign exchange (FX) interventions in Peru. The results of the study indicate asymmetries both in the Central Reserve Bank of Peru’s reaction function and in the effectiveness of FX interventions. Probit estimates of the likelihood of FX purchases and sales, in the first stage of the regression, show that both forms of intervention are targeted at leaning against the wind; that is, resisting appreciation in the former case and resisting depreciation in the latter. But only FX sales, not FX purchases, react to volatility. Similarly, instrumental variable regression results show evidence of asymmetry in the effectiveness of FX interventions. Keywords: ISCR; CR; Peru; revenue; investment slowdown; FX intervention; U.S. dollar; real GDP; economic activity; net resource wealth; resource revenue; investment theory; investment growth; FX purchase; Exchange rates; Fiscal governance; Natural resources; Capital flows; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2014/022 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Staff Country Reports from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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