EconPapers    
Economics at your fingertips  
 

Central bank interventions in a dollarized economy: managed floating versus inflation targeting

Gabriela Mundaca

Empirical Economics, 2018, vol. 55, issue 4, No 5, 1507-1535

Abstract: Abstract Effects of interventions by the Banco Central de Reserva del Peru (BCRP) on the sol/USD exchange rate are studied. The BCRP is currently committed to following an inflation-targeting (IT) regime to intervene in the foreign exchange market only to reduce exchange-rate volatility and during specific segments of the day and to make these interventions public information. We find that interventions in the foreign exchange market by the BCRP have been effective in moving the sol/USD in the intended direction during both the past managed floating regime and the current IT regime. Interventions have, however, increased the volatility of the sol/USD, and this increase has continued very strongly under the IT regime. A conclusion is that the BCRP might not yet have gained a sufficiently strong reputation to effectively reduce the exchange-rate volatility.

Keywords: Foreign exchange interventions; Intra-daily exchange rates; Conditional volatility; Emerging countries (search for similar items in EconPapers)
JEL-codes: C32 E58 F31 F33 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s00181-017-1331-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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: https://EconPapers.repec.org/RePEc:spr:empeco:v:55:y:2018:i:4:d:10.1007_s00181-017-1331-5

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-017-1331-5

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-04-06
Handle: RePEc:spr:empeco:v:55:y:2018:i:4:d:10.1007_s00181-017-1331-5