PENSION FUND MANAGERS BEHAVIOR IN THE FOREIGN EXCHANGE MARKET

Hernando Vargas H. () and Yanneth Rocio Betancourt ()

BORRADORES DE ECONOMIA from BANCO DE LA REPÚBLICA

Abstract: The effects of the Pension Fund Managers (PFMs) behavior on the foreign exchange market may be important, given the increasing size of their portfolio and their possible market power. Some authors argue that when big investors like PFMs trade large volumes in the foreign exchange market, they may influence other agents’ decisions, increasing the impact of the PFMs’ actions on the exchange rate. However, when PFMs have market power, they will take into account their influence on the exchange rate and will moderate their trading volume. Hence, there might be a mitigating effect that reduces the pressure on the exchange rate. This paper seeks to demonstrate the existence of this effect under different theoretical foreign exchange market structures.

Date: 2006-03-01
View list of references View citations in EconPapers

Downloads: (external link)
http://www.banrep.gov.co/docum/ftp/borra391.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:col:000094:003317

Access Statistics for this paper

More papers in BORRADORES DE ECONOMIA from BANCO DE LA REPÚBLICA
Series data maintained by Norma Judith Paternina ().