Interventions Versus Customer Transactions: An Alternative Test of the Signalling Hypothesis

Andreas Fischer () and Mathias Zurlinden

No 1864, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The intra-daily efficacy of interventions by the Swiss National Bank (SNB) is examined for the 1986–94 period. The paper extends results from earlier studies because it uses the actual intervention exchange rates and all SNB interventions are known to the market. Our test of the signalling hypothesis, which distinguishes between interventions and customer transactions, is similar in spirit to US studies that exploit the informational differences between reported and unreported interventions. A key finding is that only initial interventions matter; customer transactions and subsequent interventions have no influence.

Keywords: exchange rate intervention; signalling hypothesis (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 1998-04
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