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Causes and Effectiveness of Foreign Exchange Interventions for the Turkish Economy

Ozge Akinci, Olcay Çulha, Umit Ozlale and Gülbin Şahinbeyoğlu

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: Foreign exchange rate interventions of the central banks for the emerging market economies are studied only to a limited extent. However, due to the different characteristics of these economies, especially in terms of the exchange rate dynamics, such an analysis can reveal important information. This study analyzes both the causes and the effectiveness of foreign exchange interventions of the Central Bank of the Republic of Turkey in the post-crisis period. We find that, as officially stated by the Central Bank, the main motivation behind the interventions is the excessive volatility in the exchange rate. Regarding the effectiveness of the interventions, the large and isolated purchase-based interventions seem to be effective in decreasing the volatility in the exchange rate.

Keywords: Foreign Exchange Interventions; Emerging Markets; Probit Analysis; and GARCH Models (search for similar items in EconPapers)
JEL-codes: C22 C35 E58 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cwa and nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:0505

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