Effectiveness of central bank intervention on the foreign exchange market

Karl Finger and Stefan Reitz

No 46, Kiel Policy Brief from Kiel Institute for the World Economy (IfW Kiel)

Abstract: In contrast to academic recommendations monetary authorities all over the world intervene on the foreign exchange market to actively manage the exchange rate. Particularly in the aftermath of the global financial crisis the exchange rate is abused by some countries in a currency war to artificially improve the own competitiveness and thereby harming trading partners. Aside from these heavily debated activities a number of open economies try to shield their currency from irrational exuberance of international investors and use interventions to maintain exchange rates around their fundamental levels. This study shows theoretically and empirically how intervention operations can be effective in the latter sense.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/57187/1/690214715.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkpb:46

Access Statistics for this paper

More papers in Kiel Policy Brief from Kiel Institute for the World Economy (IfW Kiel) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().