The Use of Foreign Exchange Swaps by Central Banks: A Survey

Catharina Hooyman

No 1993/064, IMF Working Papers from International Monetary Fund

Abstract: The paper discussed the use of foreign exchange swaps by central banks. Such use has aimed at affecting domestic liquidity, managing foreign exchange reserves, and stimulating domestic financial markets. It discusses these different uses and present evidence for a selected group of countries. The paper cautions about the use of foreign exchange swaps to defend a particular exchange rate at a time when foreign exchange reserves are under pressure. It notes, finally, that use of foreign exchange swaps by central banks has been losing importance.

Keywords: WP; swap; currency; dollar; market; U.S. dollar; swap operation; swap transaction; forward market; Turkish lira; Fed issues dollar; profit and loss account; swap facility; Kuwaiti dinar; central bank loss; U.S. dollar swap facility; central bank need; Currency swaps; Currency markets; Currencies; Exchange rates; Africa; Global (search for similar items in EconPapers)
Pages: 30
Date: 1993-08-01
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Citations: View citations in EconPapers (8)

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