Foreign Exchange Market Intervention

Vicki Newman, Chris Potter and Michelle Wright
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Vicki Newman: Reserve Bank of Australia
Chris Potter: Reserve Bank of Australia
Michelle Wright: Reserve Bank of Australia

RBA Bulletin (Print copy discontinued), 2011, 67-76

Abstract: The Reserve Bank’s approach to foreign exchange market intervention has evolved since the float of the Australian dollar in 1983, as the Australian foreign exchange market has developed and market participants have become better equipped to manage their foreign exchange risk. Over time, foreign exchange market intervention has become much less frequent and more targeted towards addressing periods of market dysfunction. This article presents a new dataset and summarises the key characteristics of major intervention episodes since the late 1980s. Some simple regression analysis is undertaken to gauge the effectiveness of these interventions, but the results mainly illustrate the inherent limitations of such exercises.

Keywords: Australian dollar; foreign exchange market; intervention; exchange rate policy (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbabul:dec2011-07

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