When Is Foreign Exchange Intervention Effective? Evidence from 33 Countries
Marcel Fratzscher (),
Lucio Sarno () and
No 1518, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
This study examines foreign exchange intervention based on novel daily data covering 33 countries from 1995 to 2011. We find that intervention is widely used and an effective policy tool, with a success rate in excess of 80 percent under some criteria. The policy works well in terms of smoothing the path of exchange rates, and in stabilizing the exchange rate in countries with narrow band regimes. Moving the level of the exchange rate in flexible regimes requires that some conditions are met, including the use of large volumes and that intervention is made public and supported via communication.
Keywords: Foreign exchange intervention; exchange rate regimes; effectiveness measures; communication; capital controls (search for similar items in EconPapers)
JEL-codes: F31 F33 E58 (search for similar items in EconPapers)
Pages: 68 p.
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mac, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed
Downloads: (external link)
Journal Article: When Is Foreign Exchange Intervention Effective? Evidence from 33 Countries (2019)
Working Paper: When is foreign exchange intervention effective? Evidence from 33 countries (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1518
Access Statistics for this paper
More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().