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Foreign exchange intervention in Asian countries: What determine the odds of success during the credit crisis?

Mei-Ching Chang, Sandy Suardi () and Yuanchen Chang

International Review of Economics & Finance, 2017, vol. 51, issue C, 370-390

Abstract: This paper investigates the factors that increase the odds of intervention success by Asian central banks in the foreign exchange market from January 2005 to November 2013. The results show that leaning-against-the-wind intervention strategies are effective in Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand, particularly to counter the pressure of appreciating domestic currency by purchasing US dollar. We find that coordinated and first day interventions are associated with higher odds of effective intervention. There is also evidence that central banks intervene to calm disorderly market.

Keywords: Central bank intervention; Credit crisis; Asian currency; Leaning-against-the-wind (search for similar items in EconPapers)
JEL-codes: E58 F31 (search for similar items in EconPapers)
Date: 2017
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