Exchange rate interventions and inflation expectations in an inflation targeting economy
Pablo Pincheira ()
Revista de Analisis Economico – Economic Analysis Review, 2018, vol. 33, issue 2, 43-78
We explore the impact of exchange rate interventions on inflation expectations and exchange rates in Chile. We consider two episodes of central bank interventions during the sample period 2007-2012. Our analysis indicate that interventions did have an impact on daily exchange rate returns. In terms of inflation expectations, we find that the intervention program carried out in 2008 had a significant, but relatively short-lived, impact on the distribution of inflation expectations at long horizons. In contrast, the intervention carried out in 2011 shows no relevant impact on the distribution of inflation expectations in Chile.
Keywords: Exchange rates; inflation expectations; inflation targeting; interventions (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 F31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ila:anaeco:v:33:y:2018:i:2:p:43-78
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