The Yen-Dollar Rate: Have Interventions Mattered?

Ramana Ramaswamy and Hossein Samiei

No 2000/095, IMF Working Papers from International Monetary Fund

Abstract: Using daily data for 1995–99, this paper estimates a simple forward looking model of the exchange rate to show that foreign exchange interventions have, on the whole, had small but persistent effects on the yen-dollar rate. Contrary to conventional wisdom, sterilized interventions have mattered. Consistent with conventional wisdom, coordinated interventions have a higher probability of success and move the yen-dollar rate by a larger margin than unilateral interventions. A probit model indicates that both an excessive appreciation and depreciation of the yen provoke interventions, and that interventions occur in clusters—if there is one today, there will likely be another tomorrow.

Keywords: WP; yen-dollar rate; yen-dollar market; yen appreciation; Interventions; exchange rates; expectations; yen depreciation; intervention dummy; sterilized intervention; Foreign exchange intervention; Exchange rate adjustments; Currency markets; Currencies; Global (search for similar items in EconPapers)
Pages: 25
Date: 2000-06-01
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Citations: View citations in EconPapers (44)

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