Motives and Effectiveness of Forex Interventions

by Melesse Tashu

2020-03-20 14:53:08

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This paper assesses empirically the motives and effectiveness of forex interventions in Peru. While the central bank of Peru states that its forex interventions aim only at containing excessive exchange rate volatility, the results of this paper show... Read more
This paper assesses empirically the motives and effectiveness of forex interventions in Peru. While the central bank of Peru states that its forex interventions aim only at containing excessive exchange rate volatility, the results of this paper show that, in practice, the interventions seem to have aimed at 'leaning against the wind' as well. The results also show that forex sales, but not forex purchases, react to volatility, indicating asymmetry in the central bank's reactions to episodes of appreciation and depreciation pressures. Similarly, the paper documents evidence of asymmetry in the effectiveness of forex interventions. Less

Book Details

Publication date December 12, 2014
Languageeng
ISBN9781498394703

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