Foreign Exchange Intervention in Developing and Transition Economies: Results of a Survey

Jorge Canales Kriljenko

No 2003/095, IMF Working Papers from International Monetary Fund

Abstract: Based on evidence obtained from the IMF's 2001 Survey on Foreign Exchange Market Organization, the author argues that, for several reasons, some central banks in developing and transition economies may be able to conduct foreign exchange intervention more effectively than the central banks of developed countries issuing the major international currencies. First, these central banks do not always fully sterilize their foreign exchange interventions. In addition, they issue regulations and conduct their foreign exchange operations in a way that increases the central bank's information advantage and the size of their foreign exchange intervention relative to foreign exchange market turnover. Some of the central banks also use moral suasion to support their foreign exchange interventions.

Keywords: WP; central bank intervention; central bank; transition economy; information advantage; economy; Foreign exchange intervention; foreign exchange market microstructure; foreign exchange net open positions; foreign exchange regulation; intervention operation; foreign exchange position; operating practice; foreign exchange market turnover; exchange rate volatility; intramarginal foreign exchange intervention; Currency markets; Exchange rates; Exchange rate arrangements; Eastern Europe (search for similar items in EconPapers)
Pages: 59
Date: 2003-05-01
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Citations: View citations in EconPapers (79)

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